The president wants more lending, less gouging and smaller paychecks. But after a year of pro-bank policies, he may not carry a big enough stick.
Instead, the administration was eager to extricate itself from toxic questions about government involvement in the economy. It accepted TARP repayment checks from Goldman Sachs, JPMorgan and numerous others in mid-June, less than eight months after they accepted billions in funds that officials said were intended to support lending.
This was far from the only bank-friendly decision by an administration that has, among other things, opposed proposals to break up the biggest banks for the sake of the safety of the financial system. Still, it left some investors scratching their heads.
"Policymakers were hellbent to get TARP money into the banks, whether they wanted it or not, and then they were hellbent to get the TARP money back out," said David Kotok, who runs the Cumberland Advisors investment advice firm in Vineland, N.J. "The government is acting counter to normalcy at every turn."
Obama knows he has public opinion on his side. At his first meeting with the bank CEOs in March, he reportedly warned the executives that the administration "is the only thing between you and the pitchforks."
The danger now is that the CEO summit will spur no meaningful action. Instead, Smick said, it could devolve into "just a good old-fashioned demagoging of the banks."
By Colin Barr, senior writer