Fees on banks would help bailout costs
The JPMorgan Chase building is seen in New York City.
TEXT OF INTERVIEW
Bill Radke: Today, President Obama is scheduled to announce new fees on the big financial firms. The plan would raise an estimated $100 billion to cover losses from the public bailouts. Marketplace's Sam Eaton joins us live in our studio. Hi, Sam.
Sam Eaton: Good morning, Bill.
Radke: What do we know about these new bank fees?
Eaton: Well the latest information is that the fees are expected to be spread out over as much as a decade in order to discourage banks from passing the costs on to consumers in any significant way. And the amount of money each bank pays will be based on the amount of their liabilities. The fees would hit about 50 firms with assets of over $50 million. Now the White House isn't naming names, but it isn't hard to figure out who will bear the brunt of these new fees: JP Morgan, Citigroup and Bank of America being at the top of that list.
Radke: What with this do to the federal budget deficit?
Eaton: Well unfortunately we're talking about a much bigger political impact than a fiscal one. And this is evident even in the name of the proposal, which is called the "financial crisis responsibility fee." There's a huge amount of public anger over the bailouts, especially as this year's bonus season on Wall Street is looking like its going to break records. Much of what this fee will do is to tap into that anger as a way to limit the fallout from voters ahead of next November's congressional elections.
Radke: Marketplace's Sam Eaton, thank you.