10 Banks Released From The Tarp Program And Allowed To Repay Taxpayer Money
After months of undergoing stress tests in the Troubled Asset Relief Program (TARP), the Treasury Department finally let ten major banks exit the program and begin repaying their borrowed tax money which is estimated to reach $68.3 billion dollars which will be distributed to further recovery programs. Some of the banks that are being let lose are: US Bancorp, State Street Corporation, Capital One Financial, BB&T Corporation, Bank of Modern York Mellon, American Express, Morgan Stanley, and Northern Trust. Northern Trust was the only bank not to undergo stress tests. Mr. Obama stated that the nation will even build a small profit from loaning money to the banks, but to be careful of future outbreaks.
This action will abet many taxpayers nationwide, including me. I personally spend US Bank, and I was cautious while it was under government control and taking on stress tests. Now that the banks are more stable and can pause up on their own, I’m much more confident in putting money in the bank, and there’s no more stress from worrying about my bank foreclosing. Similar feelings will resound for bank-users across the country, and the new influx of money being stored in banks will act towards economic recovery, considering that the extremely large amount of people who began to miser their paper money at home during the bailout had a substantial impact on the circulation of money, effectively hurting the economy.
Mr. Obama makes a chilling statement to the recovering banks: “I also want to say: the return of these funds does not provide forgiveness for past excesses or permission for future misdeeds.” The President seems very intent that the success of these banks plays an important role in emerging from financial crisis.
Some banks such as Citigroup, Bank of America, and Wells Fargo were not permitted to leave the TARP program, and Citigroup, which borrowed $45 billion, is likely to be in the program for years. The 10 emerging banks will hurt the competition for banks such as Citigroup even more. During bailout, competition became so rough that banks put up signs saying “I’m not a bailout bank”. I don’t inquire of Citigroup or the other TARP banks to survive much longer. If I had been using one of those banks, I would immediately switch over to a financially stable one, which is what many Americans most likely have in mind.
Another problem the banks have to deal with, even after paying back the tax payers money, is the situation with their warrants. The banks had to sell their warrants to the government to prevent further bankruptcy; to fully become independent from the government they will have to buy them back. These can cost up to $4.6 billion dollars, says finance professor Linus Wilson.
The bank crisis is affecting all Americans financially, including myself. The best chance we have is to create an elitist monopoly of bank powers so that banking is more centralized, organized, and easier to handle and understand. If a bank claims bankruptcy in the future under this system, only ONE bank will need a bail-out, as opposed to dozens.
“Treasury Lets 10 Big Banks Start to repay Bailout Money” – Eric Dash
http://www.nytimes.com/2009/06/10/business/economy/10tarp.html? _r=1&hp
New York Times: June 9, 2009
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Filed under Monopoly Bankruptcy by on Nov 30th, 2011. 
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