Too Big to Fail - Andrew Ross Sorkin [284]
After that, Paulson explained, the plan was to sequester all the CEOs in separate rooms. “We let them think it over. They can talk to their boards. And we can answer their questions if they have them,” he said. “And then we’ll reconvene at 6:30 p.m.”
“Let’s hope this works,” Paulson said encouragingly, as the group got ready to march down the hallway to, if not the biggest meeting of their careers, certainly the most historic.
Outside the Treasury building every attempt that had been made to keep tight control over the meeting had become moot. Jamie Dimon had arrived at 2:15 p.m., some forty-five minutes early, and casually ambled down Hamilton as the group of camped-out photographers snapped picture after picture. “He caught us off guard!” Brookly McLaughlin, one of the press staffers, wrote to her colleague, who was trying to coordinate the logistics from her BlackBerry. Ron Beller showed up about ten minutes later; Kelly and Blankfein at about 2:43; and Mack and Pandit a few minutes after them. At 2:53, Lewis was still missing. Christal West was getting nervous until he finally arrived, with five minutes to spare, sneaking in through Paulson’s private entrance at the side of the building.
At 2:59 Christal West sent an e-mail to the group: “They’re all in.”
The centerpiece of the secretary’s imposing conference room is a twenty-four-foot-long mahogany table buffed to a high shine, with a Gilbert Stuart portrait of George Washington looming over it from one side of the room and a portrait of Salmon P. Chase, the secretary of the Treasury during Lincoln’s administration and the man responsible for putting the words “In God We Trust” on U.S. currency, from the other. Five chandeliers, lit by gas, hang from the vaulted rose-and-green ceiling. On the backs of each of the twenty leather and mahogany chairs positioned around the table is the U.S. insignia in the configuration of the sign for the dollar.
The nine CEOs had already taken their seats, arranged alphabetically behind placards with their names, when Paulson, Geithner, Bernanke, and Bair entered. It was the first time—perhaps the only time—that the nine most powerful CEOs in American finance and their regulators would be in the same room at the same time.
“I would like to thank all of you for coming down to Washington on such short notice,” Paulson began, in perhaps the most serious tone he had yet taken with them individually during the dramatic events of the previous weeks. “Ben, Sheila, Tim, and I have asked you here this afternoon because we are of the view that the United States needs to take strong decisive action to arrest the stress in our financial system.”
Blankfein, who was sitting directly across from Paulson, quickly turned solemn, while Lewis leaned forward to hear better.
“Over the recent days we have worked hard to come up with a three-part plan to address the turmoil,” Paulson explained.
Just as they had rehearsed, Geithner and Bernanke now took the group through the new commercial paper facility, followed by Bair’s explanation of the FDIC’s plan to guarantee bank debt. Paulson saved the key announcement for himself.
“Through our new TARP authority, Treasury will purchase up to $250 billion of preferred stock of banks and thrifts prior to year-end,” he said, with the gravity due the unprecedented measure. “The system needs more money, and all of you will be better off if there’s more capital in the system. That’s why we’re planning to announce that all nine of you will participate in the program.”
Paulson explained that the money would be invested on identical terms for each bank, with the strongest banks in the country taking the money to provide cover to the weaker banks that would follow suit. “This is about getting confidence back into the system. You’re the key to that confidence.”
“We regret having to take these actions,” he reiterated, and in case there was any confusion, he underscored the fact that he expected them to accept the