[0:00:34] ... pour money into the financial system. Are radical departure for the federal bank but critics say he gave too much to banks. And in the woods yet to reports today from the White House and the Congressional Budget Office pretty much say the federal ...
[0:08:50] ... against this and they sailed all this money going to -- to bank executives and that's that was a different programs such a program that began under bush. And it was almost certainly necessary to ...
[0:10:44] ... Well for instance you say nationalize the banks and regulate them and your writing it as others are. It was securitization that got us in the current -- know this idea of buying and selling mortgages and and banks are back in the same thing. ...
[0:10:57] ... Well yet another hit the bank regulation white papers came out of the Obama administration. Was not that. But it doesn't seem to be any any force behind it and the the bank rescues. Have come with no strings attached the the that call that Thomas had for at least be prepared. To temporarily. Nationalize or put into receivership. Some of the worst things was partly a way to make sure that. That taxpayers we're getting good ...
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[0:03:21] ... empowers engaged in a career path that resulted in a bank robbery and murder on the problem cause she supported. On General Petraeus if Huard Brandeis University alarmed -- in a career you ...
[0:09:49] ... he also advocated a government run health care program he also advocated nationalizing banks like President Obama is doing so alert came back today it's been what six years since he -- anybody up -- Hitler ...
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[0:09:15] ... you know say that the Obama administration should be kicking down doors nationalizing banks kicking out the CEOs and as you said at the start. How come the bank CEOs are getting to stay. They can't -- it just always raises the question we we heard we hear this from you ...
[0:09:58] ... even if you contemplate. And a more dramatic candidacy recapitalization. All of bank system using government money so they -- would end up with -- majority ownership. Even if you hinted that that will cause. ...
[0:10:33] ... and how are you responding to these voices calling for nationalization of banks what is not being considered and he said to what end what would it too. So I mean I see you real ...
[0:10:44] ... to what an announcer is re privatization you don't take over these banks in order for the government to run them and in fact I'm a human everytime I go to the DMV to get my driver's license renewed -- bad experience. It's okay -- the government can't even handle driver's licenses and in a pleasant -- a -- running banks. -- of the fact of the matter is that the government has taken over provided massive man a financial support its its ...
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[0:07:56] ... of -- Of a grand. Scheme. By Barack Obama to try to nationalize as much of the economy as possible upon what are you basing your hope by the way. I cannot believe that anyone ...
[0:11:55] ... his own rhetoric. Is that he truly wants to be forced to nationalize the banks in pursuit of his ultimate goal of a socialist economy. ...
[0:13:40] ... the hated demons of Wall Street to join him in rescuing the banks in order later to say that he did his best to avoid having to take over the banks only then will nationalization be an acceptable alternative what he has run out of other options. Already in the TARP and health ...
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[0:24:06] ... The bank Bank of America did you hear what they're guy said yesterday Ken Lewis is evidently you're that -- He thinks that they're they're not going to need that they're going to be able to pay off all their bad loans and debts of snow this. I think they're getting like 45 billion or something from the government and he doesn't think they're gonna meet any more than. And they're going to be fine and he's happy that. The the administration doesn't want to nationalize any of the banks he doesn't -- and yeah that's necessary and. ...
[0:33:58] ... 1990s I never invested funds. Instead those funds were deposited in a bank account and chase Manhattan. Wouldn't clients who wished to receive the profits that they believed they had earned with me. Or to redeem their principal I just went to chase Manhattan bank. And took money that belonged to them or other clients. And that's the whole puzzle way you know is -- so I ...
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[0:04:22] ... know this real -- and then this is what happens guys -- bank. When we have someone who really is more -- to be it college professor. In as president of the United States I ...
[0:13:09] ... it's done feeding at the public trough chairman Richard Parsons says the bank doesn't need any more capital objections from the government -- company the bank will remain in private hands. The company's chairman also nixed the idea that the government would have to nationalize the bank earlier this week Citigroup said it was profitable the first two months of 2009. State senator Mary Walsh has been tapped to ...
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[0:00:00] ... WBZ radio was on hand as Ken Lewis the CEO of Bank of America address the Boston College chief executives club in Boston. ...
[0:01:35] ... pain. Will be required. The past year. It's been very typical for Bank of America shareholders and associates but also for customers' businesses large and small individuals. Our communities. And of course our country. Recession ...
[0:02:37] ... same time according to an even more dramatic slowdown. In economic activity. Bank of America is working or to be part of the solution. We're providing capital families and businesses need to take new risks ...
[0:05:07] ... With -- markets and spiking credit cost there's no question that many banks are under a lot of pressure. Our challenge is to find the quickest most effective least expensive and most fair way to relieve some of that pressure. So the industry can better support. Economic recovery. But I don't speak the industry as a whole is nearly as -- as some would have us believe. US banks. As a group lost a lot of money in the fourth quarter. But. Of the more than 8300. Banks and savings institutions tracked by the FTSE. 68%. Were -- and 36%. Actually grew earnings year over year. Looking forward. Bank of America in this year to generate more than 100 billion dollars. And close to fifty billion dollars in pretax pre provision ...
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[0:00:02] ... system is central to any economic recovery. But at least one major bank executive is fighting calls to nationalize the banking system. And since Peter Howell. Joins us live from Boston now with the story Peter. Yet thank each network outside the Bank of America into it at headquarters here by Austin's financial district. Ken Lewis the CEO of BankAmerica was in town today. As a bank this had to go back three times per taxpayer bailouts. Taxpayers are now in the bank American attitude of 45 billion dollars plus another hundred billion dollars in loan guarantees. But mr. lewis' message today was we are ...
[0:00:44] ... The last thing we need to do. Distort nationalizing banks big America's chief executive Ken Lewis drew a huge crowd to the Boston College chief executives club. But despite some recent optics and troubled Bank of America stock. Lewis is still feeling pressed to dismiss speculation that his bank and others may have to be taken over by taxpayers. This in my view would be a nightmare. The announcement nationalization would immediately undermined confidence in the financial system even further and send shudders through the investment community government control awards banks. Would politicized lending decisions and capital allocation process damaging the economy. BankAmerica stock jumped 92 cents to 585 Thursday but that's only ...
[0:01:54] ... markets voting there. And saying these companies are viable. How important is. Bank of America going to have to bring out an incredible who's who from Boston's power relief. Celtics haven't -- brooks back in investing legend Peter Lynch to the patriots owner Bob Kraft. Senate president Teresa Marie possible gubernatorial candidate Charlie baker and a -- inciting a former governor bill well. Despite the pounding the Bank of America shares have taken Lewis said he's optimistic that the bank can rebound in 2009. Along with the whole national economy right now is. ...
[0:02:51] ... gives you some insight. And how can Lewis has been sealed a bank that's made more than four dozen acquisitions. Over the years and got bigger and bigger. We're behind a bank that once about it that was noticed the first national bank a -- and after several different generations wound up becoming part of Bank of America jet. What this Ken -- say about how the bank bailout effort is doing so far. Well he makes the case that even though they were reluctant in the first Friday actually take money they they were forced to accept cash from the government back in the fall. In his view he thinks it is working its leading to banks making more -- stabilize the system. It would expect America over the course of these here should make before accounting charges have -- fifty billion dollars he says Bank of America. Should be able to earn its way out of this crisis. Our thanks Peter how reporting from downtown Boston thanks ...
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[0:15:59] ... I think the stock market is saying we think you're going to nationalize the banks right. When the stock market -- and nationalize the banks and shortness to a black it's not around that time because and a national and so I agree with him on many ...
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[0:01:09] ... in the economy and it's it's waning and as a result our banks are also suffering and showing us. So it's is significant we have to stop the hemorrhaging. And that's where Washington's coming in now talking about more regulation more stimulus more plants. Fundamental. To this economic recovery. Is going to be the health of the banks I mean it's easy to poke fun at bankers these days. But it isn't the banking system in many ways the critical linchpin. In order to really jump start the economy. Absolutely that that's a very important point you are raising because the banks themselves -- the lifeblood of our economy that is if capital doesn't flow we're all realizing that now. In the whole economy ...
[0:02:28] ... essential part of that framework are these so called stress tests on banks. What the heck is a stress test for back I don't know it is for me but what's the stress test for the bank absolutely it's stress testing itself well first it stresses me to think that the government know stressed that the right. For that for the US government to now be able to stress test banks like questioned. Really there their ability in the quality of the -- just let us put down a stress test itself. Is really going -- looking at a bank's balance sheet and looking at its income stream. In assuming certain sets of scenarios such as for example unemployment figures will increase by -- you know half or 9% the next six months of the year. They're also looking GDP -- GDP will continue to drop. It also should include a stress test of saying that mortgages whether they're commercial residential. The default probabilities who often increase now we do that stress test that won't get a sense of a picture of the future. Of what banks are going to be what we consider to be strong which ones are going to be weak and and which ones are going to be ugly. In and that is the stress test. The concern I have about the stress test is what with the US government to the treasury the Federal Reserve the FDIC once they have this information right. So what kind of common sense approach the kind of thing you do like that for your health take in your car in this case we're taking in the thanks -- the the other question though related to this. Is this question of nationalizing. The banks it's some thing that has the markets scared. This past week both Ben Bernanke and Geithner both seem to indicate fairly strongly. That wasn't the direction that they were headed or preferred what's your view on so called nationalization. 13 late in fourth -- two things number one nationalization. Should not happen. Because. Because banks themselves need to take risk shareholders need to take risks and east -- each bank needs to stand on its own feet. But the reality yes the nationalization is happening it's happening because he's banks have taken excessive risk. And now needs to be fixed unfortunately there's no other players out there that is investors to go and -- up these banks. So that's what we're seeing this week the city group looks like now probably 36. To 40% of Citigroup's going to be ...
[0:05:14] ... value. These so called toxic assets absolutely wouldn't you look at these banks or the main driving forces of a bank's strength or weakness is their loan portfolio. Now we know these banks have lots of bad assets the question is what should we pay -- value of these assets that on one side we have tax payers. And if we pay too much -- were actually short changing tax -- but we don't pay enough for short changing banks and their shareholders that the delicate balance it. It's very difficult if and when you don't have a market or market that is functioning in a rational way. How do you determine value in a dysfunctional. Market exactly and that's where now the government needs to step in it looks like. Where we're going to be heading with this is going to be injection directly into the balance sheet. Converting preferred shares to common shares that'll be good for the banks and stability but bad for bank shareholders and we're seeing that now with dilution of earnings. Meanwhile as we try to fix the banking system as we see ...
[0:08:05] ... particular as you mentioned earlier our economy is so tied to a bank's. A strong bank means a strong economy we thank Yankee system is a weak economy that's critical fix that we can't fix that link. -- ...
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