Entries tagged "bailout plan"

GAO calls on Treasury to evaluate banks' use of capital injections

The Government Accountability Office, the watchdog arm of Congress, says Treasury should better measure how banks are using capital investments from the federal government. GAO on Tuesday issued several recommendations to better insure the "integrity, accountability, and transparency" of the $700 billion Troubled Asset Relief Program. In a report submitted to Congress, GAO said Treasury has yet to address a number of issues critical to the new program, which was signed into law Oct 3. Those issues needing address include determining how Treasury will ensure that the capital purchase program, or CPP, for commercial banks is "achieving its intended goals...

Scrutiny sought of latest appeal to Treasury

The Treasury should weigh carefully whether to expand its $700 billion rescue package to include nonbank lenders like GE Capital or CIT Group Inc., say commercial bankers. These types of lenders have asked Treasury to consider capital investments along the lines already in the works for banks and insurers. Nonbank commercial lenders do not collect deposits but do compete with banks for corporate borrowers. ...

Treasury's 25 garbage men

So far 25 banks have won the support of the Treasury Department, which has deployed almost $160 billion in direct capital injections, usually in the form of preferred share purchases. It's widely speculated that these banks are not going to simply use the money to open the spigots of lending, but instead to do acquisitions. J.P. Morgan Chase & Co.'s CEO Jamie Dimon recently made it clear during an earnings call that he might use some of Treasury's $25 billion for acquisitions. Even smaller banks receiving funding such as City National Bank of Beverly Hills, Calif., may seek acquisitions...

Where Wall Street meets Main Street and Congress

House Financial Services Committee Chairman Barney Frank is threatening to subpoena two hedge funds and a hedge fund association for a hearing next month. The two funds, Braddock Financial Corp. and Greenwich Financial Services, told The New York Times that they might take action if mortgage service companies participated in government-backed plans to renegotiate delinquent loans in a way that undercut their interests. ...

Dodd questions Treasury's bailout execution

As the markets continue to struggle, Senate Banking Committee Chairman Christopher Dodd (pictured) and other lawmakers are beginning to question how the Treasury Department is using the $700 billion Congress gave it to stabilize the market. So far, $250 billion of the capital has been allocated for government purchases of large minority stakes in large and small commercial and investment banks. The next $100 billion is scheduled for government acquisitions of mortgage-backed securities, the asset that lawmakers and Treasury initially expected the funds would be spent on. But will it go there? ...

Why the next treasury chief needs some charisma

With only two weeks before the presidential election, chatter about who will succeed Treasury Secretary Hank Paulson is again heating up, particularly because of the sense that whoever wins will select one quickly. Given national polls showing Sen. Barack Obama winning the election, and more importantly state-by-state poll aggregation sites like 270towin.com showing Obama exceeding the necessary 270 Electoral College votes, most of the chatter is focusing on who is likely to be on his list. However, what once was a short list has become a much longer list as evidenced by a poll on blog Clusterstock. While the...

The Times and Henry Paulson: The first postmortem

Hank Paulson speaks. In The New York Times Thursday, Joe Nocera (nailing those interviews for his book) and Edmund Andrews get an hour with the treasury chief, who, not surprisingly, is a little defensive about his tenure, particularly the event that now appears to be the inflection point of the crisis: the collapse of Lehman Brothers Holdings Inc. The piece is fascinating though, by definition, sketchy. These issues are complex; they're still very close in time -- too close really -- and Paulson remains elusive. ...

Treasury taps Ex-Im's Lambright for TARP position

The Treasury Department plans to install James Lambright, an Export-Import Bank chief since 2005, as interim chief investment officer for the government's landmark $700 billion stabilization purchase plan. Reuben Jeffery, under secretary of state for economic, energy, and agricultural affairs, once slated for the CIO position, will remain at the State Department....

America to Paulson: Thumbs down

Although traders on the floor of the New York Stock Exchange -- the heart of Wall Street -- may have greeted Treasury Secretary Hank Paulson on Tuesday like new Americans greeted Washington after Yorktown, the average American on Main Street would likely run him out of town tarred and feathered like a Loyalist if a CNN poll is any indicator. ...

The Times tries the bipolar approach to the crisis

Folks, let's make up our minds. The New York Times was so excited about Monday's 413 rise in the Dow that it declared a "re-emergence of trust" in the credit markets on the front page Tuesday. Alas, two section within, Times M&A maven Andrew Ross Sorkin was gloomily shaking his head at how slow the credit markets were to respond to a massive infusion of equity stakes, bailout funds and oceanic central bank liquidity. The headline on Sorkin's column: "One Day Does Not Constitute a Trend." ...

Treasury's visible hand in bank consolidation

It was already evident, but the papers Tuesday confirmed it: Treasury is using the bailout program to encourage bank consolidation. Simply put, Treasury (and presumeably its doppleganger, the Federal Reserve) adheres to the belief that bigger is better, or at least safer, in banking. And so despite some controversy that may ensue, more prosperous banks will be able to use the funds to buy other, weaker institutions. In short, the government is reaching into the market to insure certain results. ...

BofA's Lewis: Accepting bailout money was patriotic

Ken Lewis popped into the living rooms of America on Sunday night to say he's glad he'll personally receive less money so the bank he runs can be part of the government rescue plan. In fact, the chairman and chief executive of Bank of America Corp. said on CBS' "60 Minutes" his bank took the money even though it didn't need it, and felt it was its patriotic duty to do so....

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