ECONOMIC CRISIS

Their master-of-the-universe status already destroyed by the financial crisis, the leaders of some of the country’s largest banks endured hours of hectoring Wednesday by indignant lawmakers.

Lined up in alphabetical order at a long table in the austere hearing room of the House Financial Services Committee, the eight chief executives heard panel members blame them for the economy’s trip to the brink of catastrophe.

The scolder in chief, committee Chairman Barney Frank (D-Mass.), expressed the frustration shared by many politicians and ordinary Americans -- that because of the severity of the economic crisis the government had no choice but to bail out the same banking institutions that helped cause the calamity in the first place.

“One of the problems we have, gentlemen, is that . . . in an effort to get the credit system functioning, things will be done that will be to the benefit of the institutions over which you preside because there is no alternative,” Frank said. “You need to understand, as I think many of you do, how angry that makes people.”

Meanwhile, before the Senate Budget Committee, Treasury Secretary Timothy F. Geithner also faced a critical grilling -- about how soon the Obama administration would provide details of its financial-system rescue and foreclosure-prevention plan, and about how much more those initiatives would cost taxpayers.

So far, a total of $387.5 billion out of the $700-billion Troubled Asset Relief Program, or TARP, has been committed since it was approved last fall. That leaves a little more than $300 billion, part of which Congress has said must be devoted to helping homeowners facing foreclosure.

“I just don’t believe that’s enough money to fix housing and banking,” Sen. Lindsey Graham (R-S.C.) said of the remaining TARP money. “I just wish you would say that, because you’re going to come up here and ask us for more money.”

Geithner insisted that the remaining rescue funds, along with loans from the Federal Reserve, were sufficient for now. Acknowledging the frustration and anger over how the rescue money was spent in the waning days of the Bush administration, Geithner said the Obama administration did not want to ask for more money until it could back up the request with a detailed program.

“I also agree with you that it’s important to be candid about costs,” Geithner told Sen. Lamar Alexander (R-Tenn.). “But I want to be very careful not to come to you and ask you for resources and authority before we have as careful and compelling a case as possible.”

On Tuesday, Geithner unveiled the framework for the administration’s revamping of the financial-system rescue but provided little detail on its components, including a public-private partnership to buy toxic assets threatening the financial stability of many banks. The lack of specifics sent the stock market down sharply Tuesday, and the Dow Jones industrials plunged almost 400 points.

On Wednesday, share prices rebounded modestly, with the Dow Jones industrials gaining 50 points, or 0.6%.

Members of the House Financial Services Committee also sought promises from the bank executives that they would use the government money they received to make loans and stimulate the economy, rather than hold on to it to bolster their balance sheets.

The lawmakers also wanted assurances that the funds already committed in the bailout had not been wasted. The financial institutions at the hearing were the recipients in October of the first $125 billion invested as the Bush administration sought to thaw frozen credit markets by injecting capital into the biggest banks.

“Have the funds been used to get credit flowing again, not just to financial institutions but to consumers and small businesses?” asked Rep. Judy Biggert (R-Ill.). “How do we know additional TARP money is needed? Who needs it? How much more will be used? . . . Who’s to say that we’re not putting good money after bad?”

The executives, including the heads of Citigroup Inc., Bank of America Corp., Wells Fargo & Co., Goldman Sachs Group Inc. and Morgan Stanley, insisted that they had been lending as much as they could.

“Make no mistake: We are still lending, and we are lending far more because of the TARP,” Bank of America CEO Ken Lewis said.

“Last quarter alone, we made $22 billion in new loan commitments and $50 billion in mortgages -- a total of $72 billion in new loans,” Wells Fargo CEO John Stumpf said. “That’s almost three times what the U.S. Treasury invested in Wells Fargo.”

At the White House, Press Secretary Robert Gibbs defended the administration’s proposals, saying they weren’t being developed for their short-term effect on Wall Street.

“I think we can all go back in the both recent and not-so-recent history and see that one-day announcements have provided positive changes in the market for plans that ultimately turned out to be unsuccessful, just as negative reactions have sometimes been at the forefront of plans that worked,” Gibbs said.

Also Wednesday, the Office of Thrift Supervision urged the savings and loans that it regulates to suspend home foreclosures until the administration’s release in the next few weeks of its loan modification plan.

At the House hearing, Frank urged the big banks represented there to do the same.

“I would ask all of you now to please make sure that we have a moratorium in effect,” Frank said. “Having someone suffer foreclosure because two weeks hadn’t gone by for this program would be unacceptable. So I urge you and I urge everybody who is in this business to withhold foreclosure until we get Mr. Geithner’s program.”

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maura.reynolds@latimes.com

jim.puzzanghera@latimes.com