Ten big banks receive approval to repay TARP funds

[Joanne98]

Tuesday, June 9, 2009

Guest post: Ten big banks receive approval to repay TARP funds


Submitted by Edward Harrison of the site Credit Writedowns.

If you thought the bailout of too big to fail institutions was a massive gift from taxpayers to captains of Wall Street, the news that TARP funds are being repaid should confirm your beliefs. Just today the U.S. Treasury has agreed to allow 10 financial institutions to repay TARP funds they received last October after Lehman Brothers failed. The institutions are the following:

1.Passed the stress tests: JPMorgan Chase & Co., American Express Co., Goldman Sachs Group Inc., U.S. Bancorp, Capital One Financial Corp., Bank of New York Mellon Corp., State Street Corp. and BB&T Corp.
2.Failed the stress tests: Morgan Stanley
3.Was not subject to stress tests: Northern Trust
Here’s why this confirms your worst fears and what it means for U.S. finance going forward. The U.S. taxpayer ponied up $700 billion even while the unemployment rate has zoomed up to a 26-year high and home prices have plunged more than 30% nationwide. Going forward, things look fairly difficult for the taxpayer, but some bankers are now free to return to business as usual.

The government’s investment

According to government officials, this was an investment in the banking sector and the fact that the money is now being repaid is being touted as proof that this investment has been successful. After all, the government has received $1.8 billion in preferred dividends in the months since these monies were disbursed. But, don’t be fooled. These companies are still dependent on government largesse via debt guarantees from the FDIC and credit lines from the Fed.

Continued>>>
http://www.nakedcapitalism.com/2009/06/guest-post-ten-big-banks-receive.html

[bbinacan]

1. I hope the TARP repayment

is applied to the deficit.

[louis-t]

2. You what term I really hate?

"Going forward" Way over-used. #3, twice in one paragraph. Sheeesh!