WASHINGTON (CNN) – The controversial bank bailout program may have saved some financial institutions from crumbling, but a Treasury official said the rescue plan was actually “unfortunate.”
Speaking to a small group of reporters, Timothy Massad, Treasury Acting Assistant Secretary for Financial Stability said “it’s never fair to have to use taxpayer dollars to rescue any institution.”
“It’s terrible that we had to do this.”
Massad stressed the massive taxpayer investment was necessary in order to prevent another great depression, but hoped it would not be an option in the future.
“We have now reformed our regulatory system,” he said. “That gives us the tools to avoid having to do this again.”
On Wednesday, the Treasury Department revealed that its bank bailout, part of the Troubled Asset Relief Program (TARP) is becoming profitable.
Even though all of the 700 banks that received funding have not paid back taxpayer money, the program is now $6 billion in the black and could ultimately turn a profit of $20 billion.
The bottom line: Taxpayers have recovered $251 billion through repayments, dividends and interest, on an initial investment of $245 billion.
“The good news is that even though it was terribly unfortunate to have to do this, the cost is going to be little or none or possibly a profit.”
That level of optimism doesn’t extend to housing programs. The market is still plagued by foreclosures and loans that are underwater.
“We have a lot more work to do,” said Massad. “We’re still very committed to helping as many people as possible.”
[“It’s terrible that we had to do this.”]
[ “We have now reformed our regulatory system… That gives us the tools to avoid having to do this again.”]
Well, if we did not do THIS in the first place – how do we know THIS would not happen again??????????? Huh?
Politicans and government bureaucrats must think Americans are dumb. TARP is 2008, same as RTC in 1989. There are two laws, two governments, two societies; 1 for the rich and 1 for everyone else.
Can't wait for the music to stop, and see how many chairs are left available.
Yes t is stupid. There was no one to come to the aid of home owner. What is so unusual between the two,. Neither can manage their money so then both should pay the consequences.
"massive taxpayer investment was necessary in order to prevent another great depression"
So tell me why this sentence or something like it wasn't the title for this article. If you thing "reporting" is objective – think again.
We already had the tools to avoid a financial disaster. Cowboy investors and indifferent regulators discarded those tools and ignored (or denied) the warning signs in the aftermath. The problem is human nature (greed), not regulation.
The guy is right on target. Whether it was necessary or just a ploy by the rich to be the recipients of the largest transfer of wealth in history, I doubt we'll ever know. I believe that the original intention was for the taxpayers to eat the losses without any repayment of the debt. However, election results, public outrage, and some slick manuvering by Timothy Geithe resulted in some payback and maybe even a profit. It will happen again though. Anti-regulation politicians will negate the lessons learned and once again rescind laws to prevent another collapse and allow the regulators to get in bed with the banks once again.
Thanks for your foresight and intuition ! I believe it's acceptable if the Tax payers are payed back with interest and theres regulation to stop such a painful malady in the future !
AIG and Wall Street received a pardon without regard to severity !
I guess we will hear total silence from the "conservatives" and repugnants in reference to a program that was opposed on every level by them, that has proven to be successful. Each and every one of those that were on your podiums screaming about taxpayer money being "given" to banks that would never be recouped, obviously, you were mislead by your cloesd minded, ignorant perceptions and beliefs in the rhetoric spewed by elected "repugnants" without even looking at facts. You took the word of a bunch of misfits who have one agenda, to oppose Obama at anything his administration attempts to do. You are a bunch of idiots.
Chuck...that was a Bush program.
Bank of America received a $1.9 billion tax refund from the IRS last year, although it made $4.4 billion in profits and received a bailout from the Federal Reserve and the Treasury Department of nearly $1 trillion.
How do I get some of this scam??????
I am not buying this garbage. How is it that " all of the 700 banks that received funding have not paid back taxpayer money" but yet the "bottom line" is "Taxpayers have recovered $251 billion through repayments, dividends and interest, on an initial investment of $245 billion" It stated above that there clearly have not been any repayments yet by these banks. So how can the program be in the black? And what do they mean by dividends and interest? Dividends and interest using what? Repayments that have not yet come to fruition? So they are counting repayments (which don't yet exist) and possible profit on dividends and interest (which don't yet exist) as markers putting this program in the black? And this is sound fiscal policy? I don't think so! Sounds like another load of horse manure that they are delivering to us through the media to shut us up about where all that money went. They are giving us 'results' in theoretical dollars. Wake up people!
Not all of the banks have repaid – but many of them have (I know, I work for a super regional level bank that was one of the first to repay its TARP funds back in full).
The truth is that every bank was forced to take these funds so that it wouldn't drag down the ones that needed the money (i.e. – it would have become easy for investors to single out the banks that were in trouble and that would have lead to the collapse that TARP was supposed to avoid). That money was loaned to the institutions, and interest was accrued. Every bank wanted to repay those loans ASAP to get them off their books, because as long as they were outstanding they were considered liabilities.
TARP was never free money, no matter what you've heard on your favorite news or talk show.
It says that not all have paid back, doesn't say that none has paid back.
If the government had let these banks fail, let middle America lose it's retirement nest egg there would have been a rash of positions opened up at the top of these banks for new executives and each of them would realize they were replacing bankers whose lives were taken by angry depositors after the bankers played with their life savings. Do you think the fresh class of bank executives would have played with investors earnings again? The thought of being taken out by investors for screwing up their life savings is a good form regulations.
Hmmm, anyone think anything of the fact that this story is posted on April Fool's Day???? I'm glad that we're getting the money back but I know these regulations are not going to stay in place. The Repubs are gearing up this very minute to get into the White House and undo banking regulations, outlaw unions, destroy Social Security, disband school districts and overturn Roe V Wade. This is Devolution at its finest. Keep your guards up, my friends, and fight for the rights of people, not for corporations!
Americans who felt we should let those financial institutions go under have no concept of modern economics. We recovered from the Depression because America manufactured things and natural resources were plentiful. The world would now just adjust and shift toward India, China and other manufacturing nations and we'd be left as a relic of the past. I only hope the GOP won't sell us out to Wall Street and allow them to run unchecked again. They do tend to answer to their corporate masters...
In a bad situation the right thing was done. To many it may have looked like the wrong thing at the time, but in the long run it was right. Know if we can keep the Repugs from making a mess of it again.
Yes, and if Wall St. regulations fall back into the hands of the GOP, we're doomed to repeat history. Stay awake, voters!
Institutionalized gambling is what these banks and Wall street type did to ruin the financial system. It was enough to collect the hefty profits from mortgage, that money was not coming fast enough. They had to sell bonds against the mortgage, then some other risky financial instrument against both the bond and the original mortgage. Then they sold insurance against all the the risky instruments, until that one solid asset had 20 other paper risky elements against it.
Gambling, just plain gambling.