Obama administration allows big banks to repay TARP funds

The US Treasury Department on Tuesday approved the requests of 10 of the country’s biggest banks and financial firms to repay the bailout cash they received last year under the $700 billion Troubled Asset Relief Program (TARP).

The one-page announcement released by the Treasury did not name the banks, but put the combined total of money to be repaid at $68 billion... Press reports listed the firms as JPMorgan Chase, Goldman Sachs, Morgan Stanley, American Express, Bank of New York Mellon, State Street, US Bancorp, Capitol One Financial, BB&T Corporation and Northern Trust.

The banks’ motives in repaying the TARP handouts are entirely self-serving. Their campaign to return the money began in earnest last February, when Congress attached a provision to the administration’s stimulus package limiting executive bonuses at firms holding TARP funds to 25 percent of base salary. Wall Street was outraged, and getting out from under TARP became a central preoccupation of the banking elite.

Banks that repay their TARP cash also stand to save billions of dollars in dividend payments on preferred shares they were required to give the government in return for the taxpayer money.

More fundamentally, repaying the TARP funds is seen as a major step in shedding the increased government oversight that came with the bank rescue operation and resuming at full throttle the speculative practices that generated huge profits and executive compensation packages, until they led to an implosion of the US and global financial system last year.

...In its announcement, the Treasury Department said that the TARP money it recouped would go not to the taxpayers, but would instead go back to the Treasury, to be used for further subsidies to the banks.

One major consequence of the government’s approval of TARP repayments by the relatively stronger banks is a further consolidation of the banking system. This has, in fact, been a major objective of the bank bailout since it was launched under the Bush administration.

Those banks, such as Citigroup and Bank of America, that are not able to repay their TARP funds will find themselves at a huge disadvantage. The drive to further monopolize of the country’s financial life was spelled out in an editorial published Tuesday on the TARP repayments by the Wall Street Journal, which called for the breakup or liquidation of Citigroup.

http://www.wsws.org/articles/2009/jun2009/tarp-j10.shtml

:rofl:

Of course!

One bill? Two? Any?