The president is also expected to discuss the sweeping financial regulatory reform package that the administration is currently trying to push through Congress during Monday's scheduled meeting.
Officials said that the list of attendees has not yet been finalized, but that it is likely that executives from some of the nation's biggest banks will be present.
The extent to which banks have been willing to lend has remained a focal point for Washington, after the U.S. government pumped billions into the banking sector over the past year in an effort to get the economy back on track.
Consumers and small businesses in particular contend that loans are still tough to come by. Banks maintain that they are lending even as the appetite for new loans has dropped off. CNN
In other financial news, Timothy Geithner discusses the TARP exit strategy in a letter to Nancy Pelosi:
Dear Madam Speaker:
I am writing to update you on the status of the Obama Administration’s financial policies, including programs initiated under the Troubled Asset Relief Program (TARP) established by the Emergency Economic Stabilization Act of 2008 (EESA), the results they have achieved, the challenges ahead, and our plan for exiting TARP.
These policies are working. When the Obama Administration took office, the financial system was extremely fragile and the economy was contracting sharply. The Administration’s financial and economic policies have helped to shore up confidence in our financial system. Credit is starting to flow again to consumers and businesses, and the economy is growing. Further, private capital is replacing public capital in our major institutions.
As a result of improved financial conditions and careful stewardship of the program, losses on TARP investments are likely to be significantly lower than previously expected. We now expect a positive return from the government’s investments in banks. These banks will soon have repaid nearly half of the TARP funds they received. We also expect to recover all but $42 billion of the $364 billion in TARP funds disbursed in FY2009. Further, we plan to use significantly less than the full $700 billion in EESA authority. As a result, we expect that TARP will cost taxpayers at least $200 billion less than was projected in the August Mid-Session Review of the President’s Budget.
But significant challenges remain. Too many American families, homeowners, and small businesses still face severe financial pressure. Although the economy is recovering, foreclosures are increasing, and unemployment is unacceptably high. Businesses are still cautious in the face of uncertainty about the strength of the recovery, and many small businesses face very difficult credit conditions. Although bank lending standards are starting to ease, many categories of bank lending continue to contract. This contraction has hit small businesses very hard because they rely heavily on such lending, and do not have the ability to substitute credit from securities issuance. Commercial real estate losses also weigh heavily on many small banks, impairing their ability to extend new loans. Read the rest here
