Obama to Bankers: I'm Serious About Deficit Reduction

Wall Street bankers have been told by the White House that President Obama is serious about deficit reduction and views it as a “legacy” issue for his administration, sources told the FOX Business Network.

Talks between Wall Street executives and the administration began almost immediately after the President’s re-election and the discussions have been largely cordial, despite talk that banks are bracing for a new round of tougher regulations. At least for now, there are no signs of acrimony and discussions with executives have been cordial, a banker familiar with the talks says.

However, a key item for banks remains unresolved: who will run the Department of the Treasury once Timothy Geithner steps down. Geithner has indicated he will not stay on. Bankers believe Obama chief of staff Jack Lew remains the front runner for that job, and he is viewed as largely partisan and somewhat anti-bank for Wall Street’s taste. Still, bankers say they also believe former Clinton chief of staff Erskine Bowles remains a candidate. That would be more palatable for Wall Street, bankers say.

A big issue with Bowles, though, is that he has told people the job doesn’t interest him. But banking sources say they believe he can be lured to the job if the President vows to follow a framework for deficit reduction created by Bowled and former Wyoming Sen. Alan Simpson.