The Homa Files

 Ken’s Take: The retroactive conficatory tax on bonuses will insure a rush to TARP doors … shooting the program smack dab in the foot …

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Excerpted from CNNMoney.com, “Banks: Take My TARP. Please!”, by David Ellis, March 12, 2009

Just weeks after Congress removed a key hurdle that prevented banks from paying back funds from the Troubled Asset Relief Program, or TARP, some banks are already queuing up with checks in hand.

So far, three banks have formally declared their intentions to pay back the government, and the list doesn’t include the dozens of institutions that were approved for government aid, but subsequently decided to turn down the money.

But even more banks are poised to return TARP money, including some of the nation’s largest.

PNC and US Bancorp, as well as JPMorgan Chase and Goldman Sachs, have been stating they hope to return the funds as quickly as possible. A repayment by those four alone would return an estimated $49.2 billion to government coffers.

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Some institutions have argued that it is too costly to keep government capital on their books at a time when banks in general have been resistant to make new loans as the economy sours and more Americans lose their jobs.

Other banks have suggested that the recently passed stimulus package, which included a measure aimed at reining in bonuses for senior executives and top earners at banks that got TARP funds, would harm their firms even further.

Others worry that regulators or lawmakers could change the accompanying terms of the government’s capital purchase program as they see fit in the future.

For example, some fear that banks which have received TARP funds could be pushed to make certain types of loans or fulfill some sort of loan quota, following the ongoing public outcry that banks are not lending.

Edit by DAF

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Full article:
http://finance.yahoo.com/banking-budgeting/article/106724/Banks-Take-My-TARP-Please!

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This entry was posted on March 23, 2009 at 7:15 am and is filed under Financial Crisis, Obama Administration. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.