By KEN SWEET AP Business Writer
NEW YORK — The heads of seven of the largest banks in the U.S. fielded sometimes contentious questions from a House committee on Wednesday, some dealing with current risks to the financial system and other focused on more politically-charged topics.
The appearance by the chief executives of JPMorgan Chase, Goldman Sachs and five other banks represented the largest gathering of leaders of the banking industry before Congress since the financial crisis.
The CEOs told members of the House Financial Services Committee they’ve taken steps to improve the stability of their institutions since the financial system nearly seized up in 2008. The banks have raised capital, are more diverse, have closed businesses and are more resilient than they were before the financial crisis, the CEOs said.
“Post-crisis reforms have made banks much safer and sounder in three important areas: capital, liquidity and resolution and recovery,” said Jamie Dimon of JPMorgan.
The backdrop of this hearing is the 10-year anniversary of the 2008-2009 financial crisis. The banking system required extraordinary efforts by regulators — and a bailout by U.S. taxpayers — in order to survive. All seven banks appearing in front of Congress received funds under the $700 billion Troubled Asset Relief Program, and all paid billions of dollars in penalties and fines for their behavior heading into the housing bubble.
“I am concerned that several of these institutions are simply too big to manage their own operations, too big to serve our communities and too big to care about the harm they have caused,” said Rep. Maxine Waters, D-California, who is the chair of the Financial Services Committee.
The hearing had some policy questions, but many members of Congress took their time to ask politically-charged questions of the CEOs, on topics ranging from gun regulations to executive compensation to climate change. A Republican congressman, Steve Stivers of Ohio, asked the CEOs what they considered the biggest non-business risks to the banking system. The CEOs talked about how economic growth is slowing across the globe, and again mentioned cybersecurity as a big risk to the banking industry.