Saturday, April 11, 2009
Gov't asks where's the cheese and Banks provide the whine
The government and the banks are reaching a point of no return in the current round of bailouts. As the "stress tests" are winding up, we will see who can stand and who will fall. Some of the banks who are still solvent are finding out that repayment involves more that just the principal, and they are complaining about paying out a fair return to the taxpayers.
Both large and small banks have pressed the Obama administration to make it less costly for them to exit the bailout program by waiving the right to exercise stock warrants the banks had to grant the government in exchange for the loans. At a meeting last month, the chiefs of three of the largest banks separately asked Mr. Obama to direct the Treasury not to exercise the warrants, Mr. Fine said.Unfair my ass, that's what the banks would call a smart investment if the money was going the other way. And besides, a contract is a sacred and must be kept, so sucks on yer all, you WATB!
Douglas Leech, the founder and chief executive of Centra Bank, a small West Virginia bank that participated in the capital assistance program but returned the money after the government imposed new conditions, said he complained strongly about the Treasury Department’s decision to demand repayment of the warrants. That effectively raised the interest rate he paid on a $15 million loan to an annual rate of about 60 percent, he said.
“What they did is wrong and fundamentally un-American,” he said.
Subscribe to Comments [Atom]
Post a Comment