Throughout the crisis, a whole genre has emerged where the writer takes us inside the last-minute negotiations behind major banking events. The first big one was the Bear Stearns account, which contained the fantastic poetry: “Hunger pangs had taken hold. Someone ordered Chinese food. A security guard lay out a buffet spread.”
The Journal’s account of the meeting between the nine family heads, Bernanke and Paulson doesn’t get quite so detailed (added: though it does say that they ordered sandwich from Potbelly Sandwich Works):
As the meeting neared a close, each banker was handed a term sheet detailing how the government would take stakes valued at a combined $125 billion in their banks, and impose new restrictions on executive pay and dividend policies.The participants, among the nation’s best deal makers, were in a peculiar position. They weren’t allowed to negotiate. Mr. Paulson requested that each of them sign. It was for their own good and the good of the country, he said, according to a person in the room.
During the discussion, the most animated response came from Wells Fargo Chairman Richard Kovacevich, say people present. Why was this necessary? he asked. Why did the government need to buy stakes in these banks?
Morgan Stanley Chief Executive John Mack, whose company was among the most vulnerable in the group to the swirling financial crisis, quickly signed.
Bank of America’s Kenneth Lewis acknowledged the obvious, that everyone at the table would participate. “Any one of us who doesn’t have a healthy fear of the unknown isn’t paying attention,” he said.
The article concludes:
The meeting ended at about 4 p.m. By 6:30 p.m., all of the sheets had been turned in and signed by the CEOs. No second meeting was held.