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Top Trump official calls bankers, will convene “Plunge…

Trump’s Treasury Secretary Mnuchin startles the six top US bankers with call to reassure them amid Wall Street jitters over shutdown – and reveals administration’s plan to convene the so-called ‘Plunge Protection Team’ to stem losses

  •  U.S. stocks have fallen sharply in recent weeks with the S&P 500 index on pace for its biggest percentage decline in December since the Great Depression
  • Treasury Secretary Steven Mnuchin called six top US bankers on Sunday amid concerns over falling stocks
  • He talked with the chief executives of Bank of America, Citi, Goldman Sachs, JP Morgan Chase, Morgan Stanley and Wells Fargo
  • Mnuchin ‘also confirmed that they have not experienced any clearance or margin issues and that the markets continue to function properly’

President Trump’s Treasury secretary called six top US bankers on Sunday amid concerns over falling stocks, and has revealed he plans to convene a group of officials known as the ‘Plunge Protection Team.’

U.S. stocks have fallen sharply in recent weeks on concerns over slowing economic growth, with the S&P 500 index on pace for its biggest percentage decline in December since the Great Depression.

‘Today I convened individual calls with the CEOs of the nation’s six largest banks,’ Treasury Secretary Steven Mnuchin said on Twitter shortly before financial markets were due to open in Asia.

Treasury Secretary Steven Mnuchin called six top US bankers on Sunday amid concerns over falling stocks

U.S. equity index futures dropped late on Sunday as electronic trading resumed to kick off a holiday-shortened week. In early trading, the benchmark S&P 500’s e-mini futures contract was off by about a quarter of a percent.

The Treasury said in a statement that Mnuchin talked with the chief executives of Bank of America, Citi, Goldman Sachs, JP Morgan Chase, Morgan Stanley and Wells Fargo.

‘The CEOs confirmed that they have ample liquidity available for lending,’ the Treasury said.

Mnuchin ‘also confirmed that they have not experienced any clearance or margin issues and that the markets continue to function properly,’ the Treasury said.

Mnuchin’s calls to the bankers came amid a partial government shutdown that began on Saturday following an impasse in Congress over Trump’s demand for more funds for a wall on the border with Mexico. Financing for about a quarter of federal government programs expired at midnight on Friday and the shutdown could continue to Jan. 3.

U.S. stocks have fallen sharply in recent weeks on concerns over slowing economic growth, with the S&P 500 index on pace for its biggest percentage decline in December since the Great Depression

U.S. stocks have fallen sharply in recent weeks on concerns over slowing economic growth, with the S&P 500 index on pace for its biggest percentage decline in December since the Great Depression

'Today I convened individual calls with the CEOs of the nation's six largest banks,' Treasury Secretary Steven Mnuchin said on Twitter

‘Today I convened individual calls with the CEOs of the nation’s six largest banks,’ Treasury Secretary Steven Mnuchin said on Twitter

The Treasury said Mnuchin will convene a call on Monday with the president’s Working Group on Financial Markets, which includes Washington’s main stewards of the U.S. financial system and is sometimes referred to as the ‘Plunge Protection Team.’

The group, which was also convened in 2009 during the latter stage of the financial crisis, includes officials from the Federal Reserve as well as the Securities and Exchange Commission.

Wall Street is also closely following reports that Trump has privately discussed the possibility of firing Federal Reserve Chairman Jerome Powell. Mnuchin said on Saturday Trump told him he had ‘never suggested firing’ Powell.

WHAT IS THE PLUNGE PROTECTION TEAM? 

The Plunge Protection Team is the colloquial name for the Working Group on Financial Markets, created by an executive order by President Ronald Reagan in 1989 after the stock market crash in 1987.

Members include the Secretary of the Treasury, the Chairman of the Board of Governors of the Federal Reserve, the Chairman of the Securities and Exchange Commission and the Chairman of the Commodity Futures Trading Commission. 

Its purpose is to ensure the smoother running of America’s financial markets and maintain investor confidence.

The name Plunge Protection Team came from The Washington Post headline in 1997 and referred to the opinion the Working Group was being used to prop up the stock markets during a downturn.

Trump has criticized the U.S. central bank for raising interest rates this year, which could further dampen economic growth. The Fed’s independence is seen as a pillar of the U.S. financial system.

Mnuchin’s calls come as a range of asset classes have suffered steep losses.

In December alone, the S&P 500 is down nearly 12.5 percent, while the Nasdaq Composite has slumped 13.6 percent. The Nasdaq is now in a bear market, having declined nearly 22 percent from its record high in late August, and the S&P is not far off that level.

Corporate credit markets have been under duress as well, and measures of the investment grade corporate bond market are poised for their worst yearly performance since the 2008 financial crisis.

The high-yield bond market, where companies with the weakest credit profiles raise capital, has not seen a deal all month. The last time that happened was in November 2008. (Reporting by Jason Lange; Additional reporting by Dan Burns; Editing by Dan Grebler and Rosalba O’Brien)

Read more at DailyMail.co.uk


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