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Big Banks Face Off Against Congress

Congress

CEOs of America's biggest financial institutions are appearing before the Financial Services Committee on Wednesday for the first time since the 2008 crisis, facing renewed criticism over their techniques and sky-high profits.

Just one day after Big Tech heavyweights assembled before Congress, JPMorgan Chase & Co's Jamie Dimon, Bank of America Corp's Brian Moynihan, Citigroup Inc's Mike Corbat, Goldman Sachs Group Inc's David Solomon and Morgan Stanley's James Gorman are all arranged to appear before the Financial Services Committee.

Led by Democratic Rep. Maxine Waters and staffed with high-profile progressives like Alexandria Ocasio-Cortez, the panel is predicted to grill the CEOs on the safety of the financial system, settlements and diversity.

Since the 2008 collapse, the country's most notable banks have injected more than $800 billion in cash to reinforce the financial system.

Democratic legislators will examine whether too-big-to-fail banks were likewise too big to manage.

Republican Agent Patrick McHenry questioned the requirement for the hearing and knocked Democratic lawmakers, suggesting that they were looking to “dictate social and environmental policy through government actions on banks.”

In remarks prepared for the hearing, bank heads highlighted their push to hire more women and minorities, while praising guidelines for making banks more sound.

Morgan Stanley's James Gorman tackled the Volcker Rule, stating that its restraints on trading had kept his company from taking on too much risk. Related: Is The Corporate Debt Bubble About To Pop?

Unlike the remainder of the bank leaders appearing before Financial Services Committee, JPMorgan Chase boss Jamie Dimon appeared before Congress many times prior to and following the financial crisis.

The banks worked diligently for the weeks leading up to the hearing, preparing a strong review of issues like organization, lending and minority hiring. They have also begun taking action to address some of Congress' complaints and practiced their speeches in small in-house meetings with other employees pretending to be hostile members of Congress.

Big Bank stock prices weren't moving much as markets opened, with JPMorgan and Wells Fargo up less than 0.1 percent. BofA gained about 0.3 percent, while Goldman and Morgan Stanley were down about 0.3 percent.

By Michael Kern for Safehaven.com

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