March 27 (Bloomberg) -- Chief executive officers from some of the nation’s largest banks told President Barack Obama that they will work with him to revive the U.S. economy and agreed that financial-market regulations need an overhaul.

“We’re all in this together,” John Stumpf, the CEO of Wells Fargo & Co., told reporters outside the White House after meeting with Obama today. “We’re trying to do the right thing for America.”

Obama is seeking support for his plan to stabilize the financial system and move beyond the furor over bailouts and bonuses. Along with Stumpf, the CEOs he met with included Jamie Dimon of JPMorgan Chase & Co., John Mack of Morgan Stanley, Vikram Pandit of Citigroup Inc. and Lloyd Blankfein of Goldman Sachs Group Inc.

The meeting began with a discussion about the need to deal with toxic assets on bank balance sheets and to increase lending, then moved on to Obama’s plan to resolve the housing crisis, his proposals for revamping regulations and executive compensation, White House press secretary Robert Gibbs said.

“They agreed on the need to update the framework of regulation,” Gibbs told reporters.

Regarding bonuses and pay, Obama emphasized to the executives the importance of “recognizing what the American public is going through in this economic crisis,” Gibbs said.

Getting Back on Track

“The president made it clear that he’d like this country to get back on track,” Dimon told Bloomberg Television after today’s meeting. “He wants us all to help.”

While executives said that they understood financial regulations needed revamping, they had different prescriptions for new rules. Obama is proposing an overhaul that would affect banks, hedge funds, private-equity firms and derivatives markets

“Anyone who’s subject to the regulatory scheme that we’ve had up to this point can’t be happy with the state of regulation,” Blankfein said in an interview with Bloomberg Television afterward. “It is an alphabet soup of agencies.”

Still, bringing back Depression-era regulations, such as one separating investment banking from commercial banking, would be difficult, Blankfein said. “It’s hard to turn back the clock,” he said.

The Glass-Steagall Act that separated deposit-taking institutions from investment banks was overturned in 1999 with the passage of the Gramm-Leach-Bliley bill.

Banking Separation

Bank of America Corp. CEO Kenneth Lewis said before the meeting that there probably should be a separation between commercial lenders and investment banking activities. Asked what he would tell Obama, Lewis said it would be that “commercial banks are the fabric of any community in which they operate and we probably need to separate the commercial banks from the investment banking activities.”

Lewis said later that he was “talking about the rhetoric, not physically separating the two.” He said he doesn’t advocate a legal division of commercial and investment banking.

The executives also brought up repaying the government for capital doled out under the $700 billion Troubled Asset Relief Program. The bailouts have been increasingly unpopular with voters, and the administration has tightened rules on executive compensation for institutions that got the funds.

Repaying Government

Many of the executives said repaying the money would aid public perceptions of financial institutions, said Edward Yingling, president of the American Bankers Association.

“They thought it would send a very positive signal to the public to see institutions paying it back, to understand that the money was not only being paid back, but was being paid back with a good return to the public,” Yingling said.

How soon that would happen remains in question, he said. “Quickly is relative,” Yingling said.

One person in the room said some of the participants expressed concern that a rapid repayment of TARP rescue funds may be perceived as an attempt to get out from under compensation restrictions.

Yingling said one of the administration’s messages was that the bankers “need to understand the public’s anger.”

Treasury Secretary Timothy Geithner, Council of Economic Advisers head Christina Romer, economic adviser Lawrence Summers, Chief of Staff Rahm Emanuel and senior adviser Valerie Jarrett also joined the meeting with Obama and the CEOs.

At the Meeting

Other executives present included Lewis, American Express’s Kenneth Chenault, Robert Kelly of New York-based Bank of New York Mellon Corp., Ronald Logue of Boston-based State Street Corp., Frederick Waddell of Chicago-based Northern Trust Corp., Richard Davis of Minneapolis-based US Bancorp and James Rohr of Pittsburgh-based PNC Financial Services Group.

The CEOs as well as the administration officials called the 75-minute meeting a candid and honest dialogue. The group sat around a long table, with Obama in the middle and with Romer and Geithner on either side of him. Over glasses of water -- no food was served -- Obama made opening remarks and opened up the discussion to anyone else who wanted to chime in.

It was a “very frank, open conversation,” Kelly said. “Our interests are very much aligned with the administration.”

It wasn’t a relaxed meeting, though the group was engaged and attentive, according to someone who was in the room. There was an acknowledgment on the part of the bank leaders that they could have done things better, said the person, without giving specifics.

Distressed Assets

The administration’s plan to prop up the financial system is dependent in part on the financial companies being willing to sell distressed assets at prices attractive enough to create a new market and enable banks to start lending, which they have been reluctant to do.

The plan would remove banks’ distressed assets from the lenders’ balance sheets through a public-private investment program, with Treasury providing $75 billion to $100 billion to finance investors’ purchases of devalued loans and securities.

A number of the CEOs met with Geithner last night at a dinner sponsored by the Financial Services Roundtable. Steve Bartlett, the group’s president and CEO, said the event for about 150 people featured a “good, candid exchange.”

The CEOs arrived today at the White House alone or escorted by other company executives; some were quickly ushered in through the security gate by Bartlett, while others were forced to go through the usual routine for visitors. Dimon was among the first to arrive and was asked by the guard at the gate to repeat his name twice and spell it once. He said he was there for a meeting with the president.

On Wall Street, the banks today were involved in a stock retreat, trimming a third-straight weekly gain, as JPMorgan’s Dimon and Bank of America’s Lewis said in interviews with the CNBC cable station that results deteriorated in March and lower oil and metal prices dragged down commodity producers.

To contact the reporters on this story: Julianna Goldman in Washington at jgoldman6@bloomberg.net; Kristin Jensen in Washington at kjensen@bloomberg.net

Last Updated: March 27, 2009 17:12 EDT