According to an intermittently interesting WSJ story tonight, Wells Fargo was the only bank Monday to fight the idea of signing up to a preferred share deal with the U.S. Treasury. It pushed back, Treasury pushed harder and the deal got done. It is worth noting that none of the three big banks — BofA, JPM, and Citi — fought the idea as much as WFC apparently did.
It was Monday afternoon at 3 p.m. at the Treasury headquarters. Messrs. Paulson and Bernanke had called one of the most important gatherings of bankers in American history. For an hour, the nine executives drank coffee and water and listened to the two men paint a dire portrait of the U.S. economy and the unfolding financial crisis. As the meeting neared a close, each banker was handed a term sheet detailing how the government would take stakes valued at a combined $125 billion in their banks, and impose new restrictions on executive pay and dividend policies.
Question of the Day
The participants, among the nation’s best deal makers [sic.], were in a peculiar position. They weren’t allowed to negotiate. Mr. Paulson requested that each of them sign. It was for their own good and the good of the country, he said, according to a person in the room.
During the discussion, the most animated response came from Wells Fargo Chairman Richard Kovacevich, say people present. Why was this necessary? he asked. Why did the government need to buy stakes in these banks?
Morgan Stanley Chief Executive John Mack, whose company was among the most vulnerable in the group to the swirling financial crisis, quickly signed.