Treasury accepts losses as small banks exit bailout program

[xchrom]

http://www.washingtonpost.com/business/economy/tarp-auctions-leaving-money-on-the-table/2012/12/07/cbbd1e80-2524-11e2-ba29-238a6ac36a08_story.html

At 9 a.m. on Nov. 30, the Treasury Department began auctioning off its shares in seven community banks scattered across the country. Each of these institutions had taken money from the government in 2009 during the financial crisis.

By the time the bidding closed at 6 p.m. Monday, the Treasury had collected about $62 million.

Not a bad outcome, until you consider the government’s original investment: $75 million.

It was not the first time the government walked away with a loss. In 10 similar auctions conducted to date, Treasury has sold off its investments in 84 financial firms, accepting losses of about $241 million.

[RB TexLa]

1. You're down to the bottom of the barrel. Not every community can support a community bank.

[dballance]

2. I guess Treasury doesn't get the concept of a "reserve price" in an auction.

"Some small banks have taken advantage of the auctions and bought their own shares at a discount."

Imagine that. I bet the bank presidents who plunged those banks into situations that caused them to need a bailout are getting big bonuses for their smart buying back of shares at a discount. I'm baffled as to why the Treasury wouldn't require banks to buy their own stocks back at no lower value than what the US tax payers paid for that stock as part of the bailout. I recall a concept I learned in business law called "unjust enrichment." Sounds like it applies here.