Treasury Secretary Phones Top US Bankers, Plans To Convene 'Plunge Protection Team'
Government might be on a limited shutdown, and Christmas is just around the corner, but Treasury Secretary Steve Mnuchin is working to keep the Trump administration out in front of any impacts from a recent slide on Wall Street.
Mnuchin announced on Twitter Sunday that he made a round of calls with top bankers, and received positive signs that major financial institutions are sound.
Today I convened individual calls with the CEOs of the nation’s six largest banks. See attached statement. pic.twitter.com/YzuSamMyeT
— Steven Mnuchin (@stevenmnuchin1) December 23, 2018
In a statement, he also said he would “convene a call with the President’s Working Group on financial markets, which he chairs” on Monday. The group is informally known as the “Plunge Protection team.” It last met in 2009.
“Today I convened individual calls with the CEOs of the nation’s six largest banks,” Mnuchin tweeted Sunday.
A companion statement form the Treasury Department said Mnuchin spoke to CEOs of the Bank of America, Citibank, Goldman Sachs JP Morgan Chase, Morgan Stanley and Wells Fargo, Reuters reported.
The CEOs told Mnuchin “they have ample liquidity available for lending to consumer, business markets, and all other market operations.”
Mnuchin “also confirmed that they have not experienced any clearance or margin issues and that the markets continue to function properly,” the statement said.
The upshot of the calls was that despite concerns over recent interest rate hikes and a chill on Wall Street, there is no “credit crunch” like the one that triggered the 2008 recession, the Washington Times reported.
In fact, Mnuchin said many economic signals remain strong.
“We continue to see strong economic growth in the U.S. economy with robust activity from consumers and business,” Mnuchin said.
Despite the call, Wall Street was in a selling mood Monday. As of about 10 a.m. ET, the Dow Jones Industrial Average, which had dropped 400 points in earlier trading, was down about 350 points for the day. Because Monday was Christmas Eve, financial markets in New York City were only open for half a day.
Mnuchin’s reassurances to Wall Street backfiring https://t.co/c4u2v2Mqez
— Joshua Green (@JoshuaGreen) December 24, 2018
Mnuchin’s call to banks and his statement seemed “to raise more questions than answers,” Raymond James analyst Ed Mills said, according to CNBC.
Mills said prior to Mnuchin’s coments “no one had seemed to raise any concerns related to these issues of which Mnuchin is seeking to reassure the market.
Mnuchin said he and his staff will continue to monitor the situation.
“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,” he said.
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