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The central bank’s further scrutiny signals concern at the political and economic dangers of having a bank boomerang back to government aid once it leaves the program.
“The Fed doesn’t want to be criticized for allowing people to repay this and then having the banks say we just don’t have the capital to make loans now,” ....“It’s an exercise to make sure that no one is going to get criticized for allowing these redemptions.”
The Fed’s demands also partly reflect the biggest three- month rally in U.S. financial shares in at least two decades, which has made it easier for banks to raise the funds. The central bank said in a June 1 statement that the biggest 19 lenders “must successfully demonstrate access to public equity markets” before repaying TARP money.
The central bank’s further scrutiny signals concern at the political and economic dangers of having a bank boomerang back to government aid once it leaves the program.
“The Fed doesn’t want to be criticized for allowing people to repay this and then having the banks say we just don’t have the capital to make loans now,” ....“It’s an exercise to make sure that no one is going to get criticized for allowing these redemptions.”
The Fed’s demands also partly reflect the biggest three- month rally in U.S. financial shares in at least two decades, which has made it easier for banks to raise the funds. The central bank said in a June 1 statement that the biggest 19 lenders “must successfully demonstrate access to public equity markets” before repaying TARP money.
Of course they do not want the Banks running on their own again. That would derail their agenda to control them. It is unbelieveable to me that the Goverment will not allow the banks to pay this money back if they have it.
It is unbelieveable to me that the Goverment will not allow the banks to pay this money back if they have it.
Quite the contrary. There has been quite a bit of market pressures for banks to repay TARP funds before they can actually do so. By paying back money, the certain banks are attempting to influence capital markets by signifying that they are financially able to do so, even when they aren't. The Fed and Treasury quite correctly have refused to allow banks to play this game.
Quite the contrary. There has been quite a bit of market pressures for banks to repay TARP funds before they can actually do so. By paying back money, the certain banks are attempting to influence capital markets by signifying that they are financially able to do so, even when they aren't. The Fed and Treasury quite correctly have refused to allow banks to play this game.
Oh Im sorry I thought Banks were private enterprises. That is right we are in a different era now. It is going to take a while for me to get used to capitalism having been greatly eroded from our society.
Oh Im sorry I thought Banks were private enterprises. That is right we are in a different era now. It is going to take a while for me to get used to capitalism having been greatly eroded from our society.
Oh Im sorry I thought Banks were private enterprises. That is right we are in a different era now. It is going to take a while for me to get used to capitalism having been greatly eroded from our society.
You are very confused individual.
While writing about Israel's complaints about the administration "meddling" in the affairs lays out an argument that is so breathtaking simple that even folks around here might begin to grasp how childish your argument is.
"A country, a company or an individual has every right to remain free of "interference" from others as long as they remain independent of the party seeking to "interfere." But if one chooses instead to become dependent on someone else or seeks help and aid from them, then complying with the demands of those providing the aid is an inevitable price that must be paid – and justifiably so.
This is a basic lesson which most people learn in adolescence or young adulthood. Teenagers who tell their parents that they are not compelled to comply with parental dictates are typically met with the response that this is so only if they want nothing from their parents, but as long as they seek financial support, then the parents have the right to demand certain actions in return.
Similarly, businesses are free to make whatever decisions they want about how they are to be run -- as long as they remain independent. But if they go to a bank – or the federal government -- and plead for a loan, then the lender is perfectly justified in imposing all sorts of conditions ("we’ll lend to you only if you spend more responsibly, refrain from paying your executives more than X, not use the funds for Y," etc.). If banks and other companies want to be free of what conservatives and libertarians complain is undue influence from the federal government, then they shouldn’t seek loans and bailouts from the federal government."
While writing about Israel's complaints about the administration "meddling" in the affairs lays out an argument that is so breathtaking simple that even folks around here might begin to grasp how childish your argument is.
"A country, a company or an individual has every right to remain free of "interference" from others as long as they remain independent of the party seeking to "interfere." But if one chooses instead to become dependent on someone else or seeks help and aid from them, then complying with the demands of those providing the aid is an inevitable price that must be paid – and justifiably so.
This is a basic lesson which most people learn in adolescence or young adulthood. Teenagers who tell their parents that they are not compelled to comply with parental dictates are typically met with the response that this is so only if they want nothing from their parents, but as long as they seek financial support, then the parents have the right to demand certain actions in return.
Similarly, businesses are free to make whatever decisions they want about how they are to be run -- as long as they remain independent. But if they go to a bank – or the federal government -- and plead for a loan, then the lender is perfectly justified in imposing all sorts of conditions ("we’ll lend to you only if you spend more responsibly, refrain from paying your executives more than X, not use the funds for Y," etc.). If banks and other companies want to be free of what conservatives and libertarians complain is undue influence from the federal government, then they shouldn’t seek loans and bailouts from the federal government."
No I am not confused. You misunderstood.
I understand all of what you say. Of course there are conditions when you borrow money.
Where did I say I blamed one entity or the other? - O h I see how you would take that. Well I understand It is rediculous all the way around. I blamed the banks for their complete inept decision making skills and I blame the government for bailing them out. It should not have been done in the first place.
Similarly, businesses are free to make whatever decisions they want about how they are to be run -- as long as they remain independent. But if they go to a bank – or the federal government -- and plead for a loan, then the lender is perfectly justified in imposing all sorts of conditions ("we’ll lend to you only if you spend more responsibly, refrain from paying your executives more than X, not use the funds for Y," etc.). If banks and other companies want to be free of what conservatives and libertarians complain is undue influence from the federal government, then they shouldn’t seek loans and bailouts from the federal government."
Excuse me...there are companies that didn't want the money, but were urged/intimidated/forced to take it. Let's not forget that. Now, some of them want to repay the money, and aren't allowed to.
Excuse me...there are companies that didn't want the money, but were urged/intimidated/forced to take it. Let's not forget that. Now, some of them want to repay the money, and aren't allowed to.
When the government says they may repay the money, they will be allowed to do so. Until then, they'll just have to man up and live with being ordered to lend to consumers instead of investing in inflation hedges and other safer havens.
Excuse me...there are companies that didn't want the money, but were urged/intimidated/forced to take it. Let's not forget that. Now, some of them want to repay the money, and aren't allowed to.
good call- I should not count myself out so quickly.
Paulson Forced Banks to Take TARP Money: Documents - Financials * US * News * Story - CNBC.com (http://www.cnbc.com/id/30745687/ - broken link)
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