Bankers emerging with $125 billion more than they had before
Mon Jun 22, 2009, 6:39 am | Leave Comment
There is an article on http://money.cnn.com titled “How the bailout bashed the banks” by Nina Easton – Last Updated: June 22, 2009.
Major points
Was the rescue program [TARP - Troubled Asset Relief Program] necessary? We can probably assume that those signatures helped stave off a far more damaging economic collapse. Some banks, notably Citigroup, wouldn’t be alive in their current form without TARP funding. But for those that had a choice (or think they did), accepting taxpayer dollars was a decision that came with costs to their reputation as well as damage to their view of Washington politicians, most notably Congress.
Eight months into a program designed as a three-year capital infusion, the banks allowed to leave TARP are doing so. On June 17, 10 large U.S. banks, including five of the original nine, announced that they had repaid a total of $68 billion in bailout funds, following $2 billion in repayments by smaller banks. The rush to the exit door by relatively healthy banks means that TARP is on the way to becoming what Treasury has always insisted it wasn’t: government welfare, a taxpayer-funded propping-up of failed institutions.
While taxpayers can’t be expected to be sympathetic to complaints from a sector that vaporized hundreds of billions of dollars, it’s worth understanding their motivations as they bail out of the bailout or chafe within its strictures.
This is a story exploring the point of view of the often vilified parties on the receiving end of a historic experiment in government intervention, one of many that will play out in the coming years.
Read the complete article “How the bailout bashed the banks“.
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