Steven Mnuchin calls bank CEOs after Fed interest hike

December 23, 2018

Treasury Secretary Steven Mnuchin called the chief executive officers of six of America’s leading banks Sunday to garner their assurance at a time of economic anxiety that there is no replay of the 2008 Great Recession on the horizon.

According to a statement from the department, Mr. Mnuchin received assurances from the CEOs in separate calls that they have ample liquidity available for lending to consumer, business markets, and all other market operations.

The announcement comes after weeks of losses in the stock markets and fears of a burgeoning U.S.-China trade war.

But in his calls, the Treasury chief “also confirmed that they have not experienced any clearance or margin issues and that the markets continue to function properly,” meaning that the string of recent poor economic news, including the Federal Reserve Board’s increase in interest rates, isn’t leading to the kind of “credit crunch” scenario that came about in 2007-08.

“We continue to see strong economic growth in the U.S. economy with robust activity from consumers and business,” Mr. Mnuchin said. “With the government shutdown, Treasury will have critical employees to maintain its core operations at Fiscal Services, IRS, and other critical functions within the department.”

The other members of that working group include the heads of the Federal Reserve System, the Securities and Exchange Commission, and the Commodities Futures Trading Commission. The comptroller of the currency and the head of the Federal Deposit Insurance Corporation are also invited, Treasury said.

The six banking CEOs who heard from Mr. Mnuchin were Brian Moynihan (Bank of America), Michael Corbat (Citi), David Solomon (Goldman Sachs), Jamie Dimon (JP Morgan Chase), James Gorman (Morgan Stanley), and Tim Sloan (Wells Fargo).

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