Monday, November 3, 2008
Thousands of US banks set to apply for government cash
More banks could get government help
Banks are considering taking government investments under the Troubled Asset Relief Program, or TARP, because not participating in the program may be seen by the markets as a sign of weakness, according to the report.
Posted by gardeniadotnet @ 03:20 PM (506 views)
4 thoughts on “Thousands of US banks set to apply for government cash”
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renting2 says:
Why do they keep doing this? From the Washington Post (Free log in available):
Effectiveness of AIG’s $143 Billion Rescue Questioned.
A number of financial experts now fear that the federal government’s $143 billion attempt to rescue troubled insurance giant American International Group may not work, and some argue that company shareholders and taxpayers would have been better served by a bankruptcy filing.
The Treasury Department leapt to keep AIG from going bankrupt on Sept. 16, and in the past seven weeks, AIG has drawn down $90 billion in federal bailout loans. But some key AIG players argue that bankruptcy would have offered more structure and greater protections during a time of intense market volatility.
AIG declined to comment on the matter.
Echoing some other experts, Ann Rutledge, a credit derivatives expert and founding principal of R&R Consulting, said she is not sure how badly the financial system would have been rocked if the government had let AIG file for bankruptcy protection. But she fears that the government is papering over the problem with a quick fix that was not well planned.
“What we see now are a lot of games by the government to keep these institutions going with a lot of cash,” she said. “This is to fill holes in companies’ balance sheets, and they’re trying to hold at bay the charges that our financial system is insolvent.”
Fjcruiser says:
Us,UK,Europe,Asia all insolvent.
Icarus says:
It wasn’t so long ago that participating in such schemes (in the UK at least) was seen as a sign of weakness. What’s changed?
icarus says:
It wasn’t so long ago that participating in such schemes was seen (in the UK at least) as a sign of weakness. What’s changed?