President Obama sits down with CEO bankers

Here is an excerpt on PBS Nightly Business Report of Obama's meeting with CEO bankers. Here is an interview with CEO of Goldman Sachs:

LLOYD BLANKFEIN, CHAIRMAN AND CHIEF EXECUTIVE OFFICER, GOLDMAN SACHS: The president convened a very broad group of bankers. The president listened more than he spoke, but every time he spoke, it was clear that he understood all the issues at a very, very deep level.

DARREN GERSH, NIGHTLY BUSINESS REPORT CORRESPONDENT: Now it's my understanding that from the very beginning, he raised compensation issues. I'm just wondering how that discussion went, what his message was and what the bankers had to say back.

BLANKFEIN: The meeting wasn't about compensation. He did mention there was an aspect of the meeting that said, look, you understand what the reputation is of this community and part of that community, part of that reputation is driven in part by all the new -- some of the news that came out about compensation and wanted to make sure that we got it. I'd say if there was a chance that any one of us didn't get this over the last few months, we certainly have it now, believe me.

GERSH: When he said, you got it, I mean the AIG bonuses created a firestorm here in town and there was concern among bankers that this was Washington changing the rules of the game in the middle. Did that message go back to the president and what did he say about it?

BLANKFEIN: Look, the message is not about changing the rules. We're not talking about technical rules. There's a prevailing rule of sensibility and stability and things having to make sense. In-- in every rule set that ever pertained to compensation that I'm familiar with, that people would get paid for great performance and if there wasn't good performance, then people would have lower or no bonuses and maybe even have some element of a call-back to what they had before in the form of their stock depreciating. In my mind, that's always been rule.

GERSH: Now the administration came out with a very sweeping regulation which some people say would make your industry a little less competitive and perhaps grow less quickly in the future. Did that get raised? Did you say to the president, maybe this regulation needs to be rethought or what that.

BLANKFEIN: You're talking about --

GERSH: The regulatory overhaul that Treasury Secretary Geithner put forward.

BLANKFEIN: I'd say the overhaul exists mostly as an overview at this point and so there are elements of it that are going to be, I'm sure, have to be filled in (INAUDIBLE) to be filled in. I'm sure there are aspects to debate. But the whole scheme -- you know, at this point who would today -- and frankly, who would have over the last few years have debated that there needed to be a regulatory overhaul? There's an alphabet soup of different regulators that apply to different aspects of our industry, many of which have converged into each other. So we all knew that there was a need for regulation. In fact, members of the industry advocated it for a while.

GERSH: You like the blueprint that the administration has put forth?

BLANKFEIN: Again, there's a lot of detail that's not in it, but the idea of a systemic regulator for systemically important institutions that may or may not be banks, of course. I think everybody who operates on a scale like that benefits from a smooth-running system and therefore, everybody has an obligation to make sure the system is maintained.

GERSH: One of those alphabet soups you talked about is TARP. There's been reporting that you're going to pay the TARP money back. Did you tell the president that? Did that come up?

BLANKFEIN: No, it didn't come up. I think all of us are going to pay the money back. It's just a question of -- well, I think that the -- look, the TARO money was never intended to be permanent capital. It came about by extreme circumstance and when that circumstance ebbs, the money should be returned. Taxpayers expect it back. They expect to be paid back with interest and on top of interest they expect to get a bonus in the form of some upside from warrants that attach. I think any firm that can pay it back -- and by can pay it back -- I mean will not have to curtail their lending or their investing but if you can pay it back then really you should pay it back at that point. And so we have an interest in doing that as early as possible. I think that's the deal.

GERSH: The president's main concern obviously is the economy, getting things back in shape, getting people back to work. You guys see the economy from the bottom up. What did you tell him about the economy? Did you think that some people were saying maybe we've seeing tentative signs that we've reached a bottom here?

BLANKFEIN: Well, I think, look, we're all dying to see those signs. I think you could find some signs -- for example, housing starts and building permits and there were some uptick -- but it's far from a healthy economy. Look, at this point, you know, the administration has put in plans to deal with stimulating the economy and deal with plans to try to arrest the fall in real estate and putting proposals and plans to try to help the financial sector. These plans are in place but they have to be executed. I would say we're not near the end. We're not near the beginning of an end, but to steal from Churchill, we're certainly at the end of beginning. And I think that's where we are now and we'll have to go to work and make sure these plans are well executed.

Also, here is the extended Interview with Lloyd Blankfein.