Bank of America repays all of government TARP funds
source: http://www.msnbc.msn.com/id/34350133/ns/business-us_business/
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http://www.msnbc.msn.com/id/34350133/ns/business-us_business/
CHARLOTTE, N.C. - Bank of America Corp. said Wednesday it has repaid the entire $45 billion it owed U.S. taxpayers as part of the Troubled Asset Relief Program.Also Wednesday, CNBC reported Citigroup Inc plans to pay back TARP by raising money in an equity offering that could be announced as early as this Thursday, citing sources.
Bank of America, which announced its agreement with the U.S. Treasury to repay TARP last week, funded the repayment through a combination of cash on hand and the sale of $19.29 billion of securities that would convert into common stock. The stock increase remains subject to shareholder approval.
In a prepared statement, CEO Ken Lewis said the company cleared a key hurdle in demonstrating the economy's broader health, and said the bank looks "forward to continuing to play a key role in the economic recovery."
Bank of America was among hundreds of banks that received government support through the government's TARP program. The bank received $25 billion as part of the initial round of investments when the credit crisis peaked last fall. It received an additional $20 billion in January shortly after it acquired Merrill Lynch in what was a heavily scrutinized deal.
Repayment of the funds frees the bank from the government restrictions that have hampered its search for a new CEO, including executive pay limitations.
Citigroup Chairman Dick Parsons told CNBC that Citigroup was in talks with regulators about repaying its $45 billion bailout from the bailout program.
"We believe Citigroup is in a position to repay the TARP money, but there is an active discussion we have to have with regulators ..." said Parsons, who was at New York Governor David Paterson's speech on the economy on Wednesday at the Museum of American Finance.
http://www.msnbc.msn.com/id/34350133/ns/business-us_business/
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peterzylstramoore
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It is a good thing that we got that piece of our TARP money back.
Let's remember however that the bank lending rate, or money banks borrow from the Fed was zero, which means more money was printed, and lent out with no cost to the bankers. That would be like the government giving us a no interest loan, and all we have to do is make something on it, and we would be back in the black.
Let's also remember that they payed back the money they owed the government but they haven't payed anything back for giving out NINJA (no income no job) mortgages, and other subprime loans, bundling them, and packaging them off to screw up insititutions the world over, that led to a drastic increase in housing costs, which then collapsed, which has caused a major recession (that would have been depression had the financial industry been allowed to collapse).
Let's remember that it is not just the money they borrowed, but the money they got for free, the bubble and recession/depression they created, the doubling of public debt b/c of the recession that is there's.
The banks have not payed us back and if we want them to we should start charging them for Financial Transactions. A rate of 0.5% for stock (which the UK already has) and currency transactions, and a weighted rate that leads to a similar cost on other transactions, that would be payed according to the size of the transaction (which would make short term transactions expensive and not really affect long term investment) would not only make the financial mark more stable, but it would also be a progressive tax on the industry that led us into the mess, and the rich people that do their gambling on the stock market.
We have not got our money back, and we need to tax it out of them.
- 3 years ago
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peterzylstramoore
