Mnuchin called top US banks in a bid to ensure market stability

By Saleha Mohsin and Ros Krasny

Treasury Secretary Steven Mnuchin called top executives from the six largest US banks over the weekend, he said Sunday on Twitter, a move that followed heavy losses in the stock market last week and a partial federal government shutdown.

“The CEOs confirmed that they have ample liquidity available for lending to consumer, business markets, and all other market operations,” the Treasury said in a statement attached to Mnuchin’s tweet. “He also confirmed that they have not experienced any clearance or margin issues, and that the markets continue to function properly.”


On Monday, Mnuchin will convene a call with the President’s Working Group on financial markets, which he chairs, according to the statement. The group, which was created after the 1987 stock market crash, includes representatives from the Federal Reserve Board, the Securities and Exchange Commission and the Commodity Futures Trading Commission.

“We continue to see strong economic growth in the US economy with robust activity from consumers and business,” Mnuchin said in the statement.

A Treasury spokesman said Mnuchin initiated the individual calls with the six bankers because he felt that having conversations with major market participants, as well as holding the Working Group call, was prudent given considerable market volatility. The S&P 500 fell 7.1 per cent last week and the Nasdaq Composite Index entered a bear market.

Meanwhile, Monday will mark day three of a partial federal government shutdown with no immediate end in sight. “With the government shut down, Treasury will have critical employees to maintain its core operations,” Mnuchin said in the Treasury’s statement.

Sunday’s statement came a day after Mnuchin attempted late Saturday to reassure financial markets that Jerome Powell’s job is safe, following a Bloomberg News story on Friday that Trump has discussed firing the Federal Reserve chairman.

Mnuchin on Saturday tweeted a statement he attributed to Trump: “I never suggested firing Chairman Jay Powell, nor do I believe I have the right to do so.”

The president hasn’t addressed the Powell situation himself. The Wall Street Journal on Sunday reported that Trump aides have discussed setting up a meeting between the president and his Fed chief in the coming weeks.

Incoming White House chief of staff Mick Mulvaney also attempted to calm investors’ nerves on Sunday, saying in an interview on ABC that the fundamentals of the US economy are strong despite the recent market slide.

“The stock market goes up, the stock market goes down,” Mulvaney said. “We’re no more happier than anybody else over the performance of the stock market for the last month.”

According to the Treasury, the chief executives Mnuchin spoke with on Sunday were: Brian Moynihan of Bank of America; Michael Corbat of Citi; David Solomon of Goldman Sachs; Jamie Dimon of JP Morgan Chase; James Gorman of Morgan Stanley; and Tim Sloan of Wells Fargo.