Bank executives are paying back TARP funds
The favorable terms of the TARP program have been an angry blip on almost everyone’s radar. The main fallacy was perhaps the fact that the TARP project was (and is) direct intervention on the capital markets. The result has been unsatisfactory and with basically no interest, banks have been able to build profit and jump out of their, to a high degree, self-imposed difficulties. So goes the theory.
So is that why first BAC and now Citygroup are paying back huge chunks of Federal money? Citygroup is paying back 20 billion, Wells Fargo 25 billlion and earlier Bank of America TARP repayment of 45 billion. If all this will woo the government is as yet undecided but the reason behind the paybacks has less to do with profit than with self-interest. The generosity of the Banks is a result of the tie down on executive remunerations. Until the slates are clear the financial institutions couldn’t go back to the golden bonuses that attract the select few. If they really need these corporate dragons is another matter though. Which won’t matter anyway as it is not about competence but rather politics and networking and executive self-interests. When was the last time the grassroots withing these organizations got any goodies?
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