During their opening remarks, they were quick to cite numerous examples of continued lending activities and parsimony in remuneration for top executives.
Lloyd Blankfein, chief executive of Goldman Sachs, noted the firm's recent founding of a $10.5 billion senior loan fund designed to lend money to companies in need of capital. Morgan Stanley chief executive John Mack similarly named a number of companies to which the bank was continuing to lend - while Citigroup chief executive Vikram Pandit pointed to his decision to accept no bonus and a nominal salary of $1 until his company returned to profitability.
Notwithstanding this, Democratic committee chairman Barney Frank was scathing on the issue of discretionary pay. "If you weren't getting bonuses, what part of your job would you not do? Would you not come in on Wednesdays? Would you take a longer lunch break? Why do the world's most talented people have to be bribed to align your interests with people who are paying your salary?" he asked.
Morgan Stanley's Mack responded by portraying the banking industry's bonus culture as a hangover from the days of small partnerships. "All that has to be looked at again," he added.
But later, in response to a question from Republican congressman Jeb Hensarling, he also referred to some of the problems of trimming back discretionary pay. Asked if he was concerned about losing talent due to bonus restrictions, Mack said this was already happening. "We're seeing it already with our European managing directors and senior managing directors," he said, mentioning European banks had already lured some of them away with better compensation packages.
Putting a direct question to BoA chief executive Ken Lewis, Democratic congresswoman Carolyn Maloney inquired whether he had known that bonuses at Merrill Lynch were going to be paid early last year, as the firm was due to report a net loss of $15.5 billion for the fourth quarter.
"My personal involvement was very limited. We urged the Merrill Lynch executives involved in this to reduce bonuses substantially, particularly at the top," he responded. But as the firm was an independent company, he claimed BoA was unable to employ any leverage over its actions. "We had no authority to tell them what to do, we just urged them what to do," he said.
The debacle over early bonuses at Merrill helped propel the exit of former chairman and chief executive John Thain, who was due to take over as head of global banking, global wealth and investment management after the two firms merged in January.
Throughout the session, there were also repeated calls for greater consolidation and co-ordination among financial regulators, both in the US and globally.
Among others, Morgan Stanley's Mack made the case for a 'systemic risk regulator' that would combine already-existing US regulatory authorities. This would be similar to the fusion of the regulatory and enforcement functions of the National Association of Securities Dealers (NASD) and the New York Stock Exchange (NYSE), which came together to form the Financial Industry Regulatory Authority (Finra) in 2007.
"I would like to see a combination of some of our regulators. If you go back a few years, the NYSD had a regulatory arm and the NYSE regulatory arm - they put it together and now it's Finra. We need more of that," he said.
Both Mack and Jamie Dimon, chief executive of JP Morgan Chase, stressed the need for global co-ordination of financial regulation, echoing sentiments previously expressed by the Group of 30 among others.
But Dimon cautioned: "[Regulators] are not to blame for what happened. A lot of companies that were heavily-regulated had problems; a lot of companies that were not heavily-regulated had problems." However, it would be of "tremendous benefit" to have a single regulator looking at systemic risk, he added.
Addressing the causes of the crisis, excessive leverage and US trade deficits were partly to blame, according to Dimon.
Meanwhile, Blankfein of Goldman Sachs honed in on the role of rating agencies, which he said many market participants had used to outsource their due diligence. "Rating agencies were relied upon by institutions too much. That certainly contributed to the accumulation of assets on people's balance sheets they wish weren't there," he observed.
Later, Democratic congressman Mel Watt asked if whether it might be appropriate to have "more aggressive" regulation for larger US financial institutions. In response, BoA's Lewis suggested larger institutions had benefited from greater diversity of business lines, as opposed to entities such as monoline insurers and banks that were over-reliant on wholesale funding.
Nonetheless, he also underlined the systemic importance of larger institutions, saying: "If you're systemically important, the consequences of [failure] are pretty severe. That calls for an overlay of supervision beyond that of what we have now."