For bank payback, conditions apply
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Steve Chiotakis: We’re expecting an earnings report from Bank of America this morning.
So far, the big banks have reported better-than-expected numbers. We’ve also heard rumblings that giants such as Goldman Sachs and JP Morgan Chase are strong enough to pay their portion of bailout money and get back to business as usual. Today the Financial Times reports they’ll be allowed to do that — under certain conditions. Ashley Milne-Tyte reports.
Ashley Milne-Tyte: The sooner banks can re-pay their bailout money the faster they can get back to doing business without Uncle Sam breathing down their necks. As long as they’re using government money they have to stick to government rules, including restrictions on executive pay.
An administration official has told The Financial Times that banks itching to pay the government back will be able to do so after the government’s made sure it would be in the country’s economic interests. Other banks are in no such position and President Obama brought that up at a news conference this weekend.
President Barack Obama: I’m not going to simply put taxpayer money into a black hole where you’re not going to see some results or some exit strategy so that taxpayers ultimately are relieved of these burdens.
As for the banks hinting they’re ready to give the money back, the government wants to ensure the entire financial system is stable before letting the big banks cut ties to the government. And that the financial system as a whole has enough capital to allow credit to flow through the system again and fuel a recovery.
In New York, I’m Ashley Milne-Tyte for Marketplace.
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