Efforts to Repay Bailouts May Undercut Benefit for Taxpayers

[dkf]

Americans were promised a reward for rescuing the nation’s banks. In return for all those bailouts, the banks essentially granted stock options to the government — a potential jackpot for taxpayers once the crisis blew over.

But now banks, eager to get Washington out of their hair, are pushing to undo those investments as quickly — and cheaply — as possible. If the Obama administration acquiesces, billions of taxpayer dollars could be left on the table.

At issue are so-called warrants that the government received from the banks last autumn, when the financial world was teetering. Like options, warrants give their owners the right to buy stock at a set price over a certain period of time, in this case, 10 years.

Now, with many banks itching to return their bailout money, the warrants are raising some thorny questions. What are these investments worth? Should the government drive a hard bargain, or let the banks off easy? Should it maximize profit for taxpayers, or minimize pain for banks?

http://finance.yahoo.com/taxes/article/107095/Efforts-to-Repay-Bailouts-May-Undercut-Benefit-for-Taxpayers?sec=topStories&pos=4&asset=&ccode=

[kentuck]

1. Benefit for the taxpayers??

We saved their asses! Whose benefit was that?

[dkf]

3. Some banks didn't need or want the funds but were

forced to take them by Hank Paulson. They have to pay 5% interest and gave the Government warrants. It could be a huge money maker for the Government in the end.

[Yupster]

2. If they're paying the money back

that's good enough for me.

It's a lot more than I expected to happen.