US banking chiefs yesterday yielded to demands by angry members of Congress and agreed to suspend mortgage foreclosures for at least three weeks to give the US government time to finalise its financial rescue plans.

The move, which will freeze repossessions on 1m US homes, came as eight Wall Street leaders came face to face with the tide of public outrage over their banks’ role in the financial crisis. Members of Congress attacked their bonuses, lending practices and perks at a hearing in Washington.

Vikram Pandit, chief executive of Citigroup, responded to the criticism by saying he would slash his salary, which was $1m last year, to $1 and forgo bonuses until the troubled financial services group returns to profit.

The bankers, whose companies have received a large portion of the first $350bn from the government’s troubled asset relief programme (Tarp), also mounted a spirited defence of the banks’ roles in the economy.

Financial Times