Big Wall Street firms have the most bruised public reputations, but it's a collection of smaller banks that continues to plague the Treasury Department's bank bailout program.
The latest report from the agency shows that more than 120 institutions - nearly all of them small banks - have missed their scheduled quarterly dividend payments, which is more than a sixth of the banks that received federal aid during the financial crisis.
In addition, five banks that received capital injections from the $700 billion Troubled Assets Relief Program have failed altogether, making it highly unlikely that taxpayers will recover the nearly $3 billion poured into those institutions.
The Treasury report showed that at the end of August, a record six banks each missed six dividend payments...
...The rising number of "deadbeat" banks, as they are known, has prompted calls for Treasury officials to take action to protect taxpayers' investment.
The bailout legislation gives the Treasury the authority to appoint two members to the boards of banks that miss six or more dividend payments, but the agency has refrained from doing so.
Strangely, you don't hear much from the crowd that thought that TARP was a great idea these days. Heck, now we have the Obama administration and Democrats pushing for a TARP-like deal for small banks to lend to small businesses. Anybody want to take a wild guess on how that ends?
1 comment:
"Anybody want to take a wild guess on how that ends?"
Sure. It will mean another $30 billion pissed down the drain (not to mention the distortions that are hard to measure, as a result of still more Federal involvement in the financial arena).
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