Treasury Demands Banks With TARP Funds Report Lending Activity

Discussion in 'Wall St. News' started by ASusilovic, Jan 20, 2009.

  1. The U.S. Treasury, under pressure to revive lending, is demanding monthly reports from the banks that received the most capital from the government's $700 billion rescue program.

    Neel Kashkari, the official who administers the Troubled Asset Relief Program, wrote to Citigroup Inc., Bank of America Corp. and 18 others on Jan. 16 seeking figures on business and consumer loans. Treasury also wanted details on purchases of mortgage-backed and asset-backed securities, according to documents obtained by Bloomberg News. Kashkari will stay for a few months after President-elect Barack Obama is sworn in today.

    Obama's aides criticize outgoing Treasury Secretary Henry Paulson's approach to rescues as lacking transparency and not doing enough to get credit flowing though the economy. While Paulson has defended the cash injections as having averted a collapse of the financial system, Obama had to pledge changes before lawmakers approved the release of the second $350 billion.

    “Banks are becoming the whipping boy for the Treasury's failed policies,” said Joseph Mason, a Louisiana State University professor in Baton Rouge who previously worked at the Treasury's Office of the Comptroller of the Currency. “They're going to continue to face this pressure.”

    Citigroup spokesman Michael Hanretta said the bank will meet all reporting requirements. Bank of America spokesman Scott Silvestri had no immediate comment.

    I would like to borrow 1 billion from Thain. Anybody his phone number ?[/url]
  2. 1-212-SELL-MER :cool:
  3. Daal


    Heres comes the Obama US Department of Banking
  4. It has loads of subprime-mortgage bonds, souring commercial real-estate debt and collateralized debt obligations worth a fraction of their original value. This isn't Citigroup Inc. or Merrill Lynch. It is the Federal Reserve.

    In the past year, the Fed lent out more than $1 trillion in its efforts to stabilize the financial and credit markets. A chunk of that was used to buy mortgage-related securities and loans in the rescues of Bear Stearns Cos. and American International Group Inc., as well as other debt shunned by investors.

    Now, the government's recent aid packages for Bank of America Corp. and Citigroup have the Fed playing the additional role of a backstop guarantor for portfolios of about $400 billion in troubled assets that were dragging down those banks. Those assets include residential- and commercial-mortgage loans, mortgage securities, corporate leveraged loans and credit-derivative positions.