Obama Urges Banks to Clean Up Bad Assets

President Obama had a "frank" conversation Friday with a panel of top bank CEO's and urged them to deal with bad assets so they can restart lending, according to the White House.

Press Secretary Robert Gibbs said Obama, who invited CEO's from the 15 largest banks to the White House, discussed the administration's housing plan, regulatory reform and compensation issues.

"The president believed they had a good, productive and frank conversation," Gibbs said. "The president emphasized that Wall Street needs Main Street and that Main Street needs Wall Street, that everybody has to pitch in, that we're all in this together."

The chief executives who met with Obama said afterward that they are committed to helping turn around the economy.

"We want to see the American recovery," said Robert Kelly, of Bank of New York Mellon Corp.

Jamie Dimon of JPMorgan Chase & Co., Vikram Pandit of Citigroup Inc., Ken Lewis of Bank of America Corp., John Stumpf of Wells Fargo & Co., John Koskinen of Freddie Mac and Kenneth Chenault of American Express Co., were among those who attended.

The administration this week announced its program to help banks clear their balance sheets of so-called "toxic assets," bad investments that have tied up their capital and made it difficult for them to lend money.

Under the plan, the administration and private investors would take over up to $1 trillion in sour mortgage securities from banks. The goal is to free up money banks could then use for loans to businesses and consumers.

The administration also detailed its proposal for tighter regulation of the financial system. That includes giving the government broad power to take over major financial institutions that are not banks, such as American International Group, the giant insurer whose collapse would threaten the system.

AIG has received several infusions of federal bailout money, more than $170 billion in all, because administration officials say its failure would have far-reaching and devastating consequences around the world.

Obama also has announced a program to help millions of homeowners refinance their mortgages to avoid foreclosure.

Bankers called the administration's regulatory proposal an "encouraging first step" but said they wanted to see more detail.

Though Obama has spoken out against million-dollar compensation packages for executives of banks and other companies that are underperforming, Gibbs said he had "no agenda" at Friday's meeting.

"The president was very pleased about the meeting," Gibbs said. "He had no agenda beyond working to get a solution, the right solution for our financial system and to get it stabilized and working again for the American people."

The Associated Press contributed to this report.