From John Melloy: Treasury Secretary Steven Mnuchin spoke with J.P. Morgan Chase CEO Jamie Dimon, Bank of America’s Brian Moynihan, Goldman Sachs’ David Solomon, Morgan Stanley’s James Gorman, Tim Sloan of Wells Fargo and Michael Corbat of Citigroup.
- On Monday, a senior Treasury official, who declined to be named, told CNBC that the purpose of the call and putting out the statement was a “prudent, preemptive measure” following last week’s market volatility.
Treasury Secretary Steven Mnuchin held calls on Sunday with the heads of the six largest U.S. banks to shore up confidence in the U.S. financial system amid the recent market turmoil.
“The banks all confirmed ample liquidity is available for lending to consumer and business markets,” a statement from the Treasury said.
Mnuchin spoke with J.P. Morgan Chase CEO Jamie Dimon, Bank of America‘s Brian Moynihan, Goldman Sachs‘ David Solomon, Morgan Stanley‘s James Gorman, Tim Sloan of Wells Fargo and Michael Corbat of Citigroup.
“We continue to see strong economic growth in the U.S. economy with robust activity from consumers and business,” said Secretary Mnuchin in the statement.
Wells Fargo declined to comment on the calls. The other five banks did not immediately return CNBC’s requests for comment.
On Monday, a senior Treasury official, who declined to be named, told CNBC that the purpose of the call and putting out the statement, was a “prudent, preemptive measure” following last week’s market volatility. Yet while the moves were intended to be reassuring, they triggered confusion among market watchers.
Mnuchin is dealing with several issues facing investors and the financial system right now:
- A stock market sell-off that pushed the Dow Jones Industrial Average last week to its worst drop in 10 years. The S&P 500 is 17.8 percent from its record, almost a bear market.
- A president furious with the Federal Reserve chairman for raising interest rates amid the equity decline. So frustrated is President Trump that he reportedly has discussed firing Fed Chair Jerome Powell. Mnuchin sought to quell the firestorm from those reports this weekend.
- A government shutdown that will apparently drag on through at least Thursday.
The Financial Select Sector SPDR ETF (XLF) was trading at $22.33 per share on Monday afternoon, down $0.46 (-2.02%). Year-to-date, XLF has declined -19.70%, versus a -11.61% rise in the benchmark S&P 500 index during the same period.
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