Monday, March 16, 2009

Banks Reject TARP Money?

In an optimistic development, healthier banks of all sizes are upset by the obligations of accepting TARP money. Particularly offensive is the government changing the terms of the contact after the money has been borrowed and spent. After all, the only real precedent to such outrageous behavior would be the credit card industry, but anyway. Also, TARP bailouts have become an embarrassing liability to those banks which remain solvent. It seems they are under a lot of pressure from Federal authorities to make loans in a pessimistic lending environment.

I for one am glad to hear that the terms of accepting a taxpayer bailout are so noxious that banks are "threatening" to pay the money right back—Wells Fargo, Bank of America, Goldman Sachs, and JP Morgan are the some of the ones speaking up. I'm sure they much prefer the easy money indirectly handed to them via AIG. But if they do pay it back, and go on carrying out their business as any private industry should, then it's all good in my book, and I'm happy to forgive this lapse as part of the hysteria of the moment.

I ain't holdin' my breath.

UPDATE [3/23/09]: Come to think of it... Bank of America CEO Kenneth Lewis has been one of those protesting not to be needing the TARP money. However, Congress approved the second half of the TARP money, intended for the Obama Administration, a week before Obama actually took office, just so Bank of America could get an extra $20B. There were no other uses for it over that week, and Obama didn't use it for several weeks in to his administration.

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