Banks whining about "strings" attached to bailout

[ProSense]

Show Us the Money

By Josh Marshall

Stephen Labaton has another article in the Times about banks that are fed up with federal meddling and deciding to give the Feds their money back. He makes the decent point that forcing weak banks to ease the terms of the outstanding loans may have the unintended effect of making the weak banks even weaker and pushing the federal government deeper into propping them up. And the article, implicitly, shows one real truth about the banking crisis, which is that a lot of the smaller regional banks are in decent shape -- and are thus capable of paying the money back, as a few have.

But I think he's either giving too much credit to, or perhaps has been taken in by, Goldman Sachs and Wells Fargo, who have also made unconvincing noises about wanting to give the money back.

Here's the key passage ...

Some bankers say the conditions have become so onerous that they want to return the bailout money. The list includes small banks like the TCF Financial Corporation of Wayzata, Minn., and Iberia Bank of Lafayette, La., as well as giants like Goldman Sachs and Wells Fargo.

They say they plan to return the money as quickly as possible or as soon as regulators set up a process to accept the refunds. On Tuesday, Signature Bank of New York announced that because of new executive pay restrictions in the economic stimulus package, it notified the Treasury that it intended to return the $120 million it had received from the government only three months ago.

The key is 'as quickly as possible'. A number of small banks are able to give the money back, because their balance sheets are in decent shape. But that doesn't apply to any of the big banks, including Goldman and Wells Fargo, even though the latter especially seems in relatively better shape than Citi and BofA. Through direct infusions and the bailout of AIG, Goldman is in no position to swear off the federal government's extraordinary assistance. Thus, their current policy of whining, claiming they're going to give the money back and then saying, more or less, 'we'll get back to you on that' when anyone asks when.

Evidently the banks are still high from years of deregulation and expected a massive string-free bailout.

[polichick]

1. The culture is so sick that it would be better to nationalize temporarily and kick out...

...the top brass and board of directors imo.

[billybob537]

2. Hey Bankers! JUST SAY NO!!!!!

[Hutzpa]

3. Galt????

Is this their way of throwing in the trowel? If so, then let those that can do what the Government wants take the money and use it wisely, this is them not having their way of ripping their customers off.

Let them return it and this administration should expose them for what they are.

[nykym]

4. Yea!

and how many miles of string is the average person hog tied with just opening a simple savings account. I have absolutely no sympathy for any of the banks.

[damntexdem]

5. Give them some geez to go with that whine.

Or, a la Monty Python, give them a boot to the head.

[apnu]

6. They want to give it back, fine. Give it ALL back and FAIL jackasses! (nt)