« “The RETURN of President ‘Doofus’…” | Home | “May God Continue to Bless Us With People Who Choose to Be Twice as Good…” »
“Mr. Ragland, We Are Watching You…”
By Sherman Ragland | October 29, 2008
I understand that folks in the White House have been reading my blog…
… and they are not happy with my past couple of posts, but they are in agreement that giving money away to banks, rather than buying up toxic mortgages, is really starting to look like a very bad idea.
So yesterda White House Press Secretary Dana Perino BORROWED a pair of Boots from Secretary of State Rice and Started KICKING SOME BUTT…
White House tells banks getting federal aid to quit hoarding money and start lending it
Tuesday October 28, 4:11 pm ET
WASHINGTON (AP) — An impatient White House served notice Tuesday on banks and other financial companies receiving billions of dollars in federal help to quit hoarding the money and start making more loans.
“What we’re trying to do is get banks to do what they are supposed to do, which is support the system that we have in America. And banks exist to lend money,” White House press secretary Dana Perino said.
Though there are limits on how much Washington can pressure banks, she noted that banks are regulated by the federal government.
“They will be watching very closely, and they’re working with the banks,” she said.
Anthony Ryan, Treasury’s acting undersecretary for domestic finance, made the same point in a speech in New York before financial executives.
“As these banks and institutions are reinforced and supported with taxpayer funds, they must meet their responsibility to lend, and support the American people and the U.S. economy,” Ryan told the annual meeting of the Securities Industry and Financial Markets Association. “It is in a strengthened institution’s best financial interest to increase lending once it has received government funding.”
Said Perino: “The way that banks make money is by lending money. And so, they have every incentive to move forward and start using this money.”
There has been some evidence of easier lending, Perino said. But it’s not enough to calm stock markets or help small businesses that depend on a free flow of credit, not just to expand but to maintain operations through making payroll or financing inventories.
The government is making efforts on several fronts to thaw the frozen credit markets and combat the worst financial crisis to hit the country since the 1930s. But so far, the efforts have shown little in the way of results. Libor, the London Interbank Offered Rate, a key goalpost for international lending, edged down only marginally on Monday and still remains at elevated levels.
The Federal Reserve began a program Monday to purchase the short-term debt of businesses, known as commercial paper. This market has been frozen since the collapse of Lehman Brothers spooked credit markets last month.
Under the authority of the $700 billion financial bailout plan approved by Congress and signed by President Bush earlier this month, the administration also plans to dole out $250 billion to banks in return for partial ownership. The Treasury Department, which is overseeing the massive capital injection program along with the rest of the bailout, will pour $125 billion into nine of the country’s largest banks this week. Another $125 billion will go to other banks.
Treasury Secretary Henry Paulson has said the money was aimed at rebuilding banks’ reserves so that they would resume more normal lending practices. But reports then surfaced that bankers might instead use the money to buy other banks. Indeed, the government approved PNC Financial Services Group Inc. to receive $7.7 billion in return for company stock and, at the same time, PNC said it was acquiring National City Corp. for $5.58 billion.
Officials have said that there are few strings attached to the capital-infusion program because too many rules would discourage financial institutions from participating.
p/s/ If you plan on attending the “BY INVITATION ONLY” event coming up in three weeks, you better get your name on the list this week. You can get on the list and get a great bargain by going to this special website now: CLICK HERE NOW ->GOLD MEMBER SPECIAL
Popularity: 93% [?]
Topics: Uncategorized | No Comments »
Tags: dana pierno, financial executives, financial markets association, giving money, hoarding money, securities industry and financial markets association, sherman ragland, small businesses, undersecretary
Comments
You must be logged in to post a comment.