Thursday, October 22, 2009

Bailout Banks Permitted to Reimburse Now

who has paid back government asks Joe Scarborough, how many of these... a chart of names appears on Joe's help screen...


Elizabeth Warren: some will pay it all back, more likely won't get paid back completely.

Oh really now, come on, the government had refused to let 10 big banks to leave the TARP program and forestalled the repayments!

Scarborough should have known that, but he doesn't mention.

That's lying. What a sellout.

Bye bye Joe...

Not that any bailout should have occurred to begin with. It shouldn't have. But now the Obama Administration wants to curb CEO's pay and benefits and bonuses, we have to question why when the top banks have plans in the works to payback every dime of TARP money! A few have already paid back.

What industry will be next for government bailouts and more government mandates if they accept the bailouts?

It's like a friend saying hey sure I'll loan you the money, but now I have an investment in everything you earn, and if you become solvent, you can't just pay me back, you have to forego some of your profit and do what I tell you to do.

Seriously folks, this is nothing more than a way for the government to gain more and more power.

What about the bonuses government agencies pay their employees!

The federal government is in a deficit situation. It is borrowing and spending and spending. It doesn't have enough money coming in for anything extra and one could say it doesn't really have enough to pay its own employees.

So why the bonuses in federal government?

Over at Fox at least there is some clarification. Those banks who've paid back the loans won't be subject to the rules changes.

Well, wait until tomorrow. They will all pay back.

Uh oh, too late. You signed, what's yours is ours.

U.S. Unveils New Rules on Bankers' Pay
The U.S. Treasury and the Federal Reserve unveiled Thursday a set of curbs and rules for executive compensation at banks, marking a watershed moment for government intervention in the private sector.

The Fed is proposing that it more aggressively regulate compensation practices at banks under its control, including thousands of U.S. banks as well as the American subsidiaries of overseas firms.

The central bank "is working to ensure that compensation packages appropriately tie rewards to longer-term performance and do not create undue risk for the firm or the financial system," Federal Reserve Chairman Ben Bernanke said.

Meanwhile, the U.S. pay czar, Kenneth Feinberg, announced that cash salaries for top executives at seven firms that have received significant government assistance will be limited to $500,000, and their total compensation will be cut by 50%.

10 Large Banks Allowed to Exit U.S. Aid Program

Published: June 9, 2009
The Obama administration marked with little fanfare a major milestone in its bank rescue effort — its decision on Tuesday to let 10 big banks repay federal aid that had sustained them through the worst of the crisis — as policy makers and industry executives focused on the challenges still before them.

This is not a sign that our troubles are over,” President Obama said. “Far from it.”

While the announcement had been expected for weeks, the official word put the administration’s imprimatur on a corps of big banks considered healthy enough to extricate themselves from Washington’s grip.

The bank holding companies, among them American Express, Goldman Sachs, JPMorgan Chase and Morgan Stanley, plan to return a combined $68.3 billion. That represents more than a quarter of the federal bailout money that the nation’s banks have received since last October, when many feared that failures might cascade through the industry.

But the decision to allow the banks to exit the Troubled Asset Relief Program, or TARP, also ushered in a new, and potentially risky, phase of the banking crisis. Letting the lenders out now — earlier than many had envisioned, and without the industry reforms some consider necessary to prevent future crises — raises many sobering questions for policy makers, bankers and taxpayers.

The program was aimed at purchasing assets and equity from banks to strengthen them and encourage them to expand lending during a tightening credit squeeze. But after banks return the TARP money, the administration will forfeit much of its leverage over them. With that loss goes a rare opportunity to overhaul the industry. The administration’s ability to push institutions to purge themselves quickly of bad assets and do more to help hard-pressed homeowners will be diminished.

Of even deeper concern is the running trouble inside the banking industry. Despite tentative signs of revival, many banks remain fragile. Four of the nation’s five largest lenders, including Citigroup and Bank of America, were not allowed to return their bailout funds.

Some analysts worry that financial institutions that repay bailout money now may turn to Washington again if the economy worsens and losses overwhelm banks. One of the most vexing problems of the credit crisis — how to rid banks of their troubled mortgage investments — remains unresolved.

The banks are eager to escape TARP and the restrictions that come with it, particularly the limits on how much they can pay their 25 most highly compensated workers. (Even so, the Obama administration plans to propose guidelines on executive compensation for the broader industry as early as Wednesday.)

Yet even banks that return taxpayers’ money will remain dependent on other forms of government aid. Among them are enhanced deposit insurance, incentive payments to modify home mortgages and federal guarantees on bonds that banks sell to raise capital.

“They may need the government’s money to get through this storm,” Christopher Whalen, a managing partner at Institutional Risk Analytics, said of the banks. “If the banks have to come back and ask for more money in a few months, I don’t think the response from Washington will be too kind.”

Taxpayers — many of whom probably never imagined that banks would return their bailout money so soon, if ever —stand to make several billion dollars from their investment in the 10 banks. So far, the Treasury has collected about $1.8 billion in interest payments. It also might reap as much as $4.6 billion as the banks seek to expunge other government investments, known as warrants.

The first round of repayments will free up billions of dollars that the administration can then funnel to other troubled banks and companies without having to return to Congress for more money.

But homeowners and consumers are unlikely to benefit if banks repay their TARP funds en masse. Banks are giving back money that might otherwise be used to make loans.

The announcement on Tuesday underscored the stark dividing line across the banking industry. On one side are big banks now considered healthy enough to forgo their TARP money. On the other side are those considered too weak to go without it. Still, some of those weaker banks may be allowed to repay the money soon.

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