The current 110th Congress may be a lame-duck session, but rhetoric out of it by key lawmakers is putting Wall Street on notice about what's in store next year. At a Senate Banking, Housing and Urban Affairs Committee hearing Thursday, Sens. Charles Schumer, D-N.Y., and Chris Dodd, D-Conn., delivered some clear warnings to financial firms receiving bailout money.
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In a statement sure to get the attention of dealmakers, Schumer called
for the Treasury Department to be given authority for approving M&A
deals for companies receiving Troubled Asset Relief Plan money. The move would allow the
Treasury to head off attempts to use taxpayer dollars for the
acquisition of struggling rivals as opposed to restarting lending.
To that Dodd added
"hoarding capital and acquiring healthy banks are not -- I repeat, are
not -- reasons why Congress authorized $700 billion in emergency
funding. The core purpose of this law -- and the purpose of virtually
every other action taken during this crisis -- is to get lenders back
into the business of lending."
Senator Dodd also had some choice words of warning for Wall Street on compensation levels saying:
"If you believe that you would be no worse off than you are today
[without taxpayer money], then I invite you to return to the Treasury
the billions of dollars in taxpayer investments, guarantees and
discounts that you currently receive, and I wish you well as you try to
make it on your own."
With the number of bailout programs piling up alongside foreclosures
and the highest unemployment numbers since the 2001 recession, Congress
has been ratcheting up the pressure on banks to get credit markets open
by increasing lending and rejiggering mortgages to stave off
foreclosure. -
George White
See video and transcripts from Senate hearing
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Comments
It depends on HOW a bailout is structured, but one should be attempted.
BAILOUTS ARE COMPLEX BEASTS, but Try something outside the box like this to save the U.S. Auto Industry - - -
http://pacificgatepost.blogspot.com/2008/11/solution-for-detroit-gm-friends.html
Toyota and Honda also depend on the same suppliers who feed GM and FORD. No need to let “Detroit” disappear.