GAO: Almost Half of Bailed Banks Repaid the Government With Money “From Other Federal Programs”

[girl gone mad]

By Matt Stoller, former Senior Policy Advisor to Rep. Alan Grayson and a fellow at the Roosevelt Institute. You can reach him at stoller (at) gmail.com or follow him on Twitter at@matthewstoller

The Government Accountability Office continues its subtle war on the talking point used by Treasury that “TARP made money”. Here’s the GAO, with a report out today.

As of January 31, 2012, 341 institutions had exited CPP, almost half by repaying CPP with funds from other federal programs. Institutions continue to exit CPP, but the number of institutions missing scheduled dividend or interest payments has increased.

Much of the government-supplied TARP funding (to small banks) was replaced by the Small Business Lending Fund passed in 2010, which Republicans called “TARP 2.0″. The larger banks, however, where much of the bank-based credit creation in the economy takes place, didn’t use this program. Instead, they got an implicit subsidy of between $6B and $300B a year from the widespread belief that the government will not let their bondholders lose money.

The talking point that the Troubled Asset Relief Program made money for the taxpayer is an important structural argument for the Treasury Department and the political elements in the Obama White House. Yves Smith quoted an earlier GAO report on this phenomenon a few months ago.

read more: http://www.nakedcapitalism.com/2012/03/gao-almost-half-of-bailed-banks-repaid-the-government-with-money-from-other-federal-programs.html

[xchrom]

1. Du rec. Nt

[2pooped2pop]

2. but but but They've done nothing wrong

It's all legal. Even if it is laws bought and paid for by the banks for the banks.

:fucking rat bastards: hmmm, no smiley for that.