Banks Want Out Of TARP
May 17, 2009 by Tisa Silver
Filed under Finance
The government’s stress test revealed that nine banks had sufficient capital to withstand worsening economic conditions. Some of those banks are raising capital anyway. Why?
Because they want out of TARP! Here are some thoughts on TARP from bank CEOs:
Photo by epicharmus, courtesy of flickr
“We believe that the TARP investment, philosophically, is not good for our company from a long-term point of view, because of the entanglements of how we run the business, including how we compensate our people” – Kelly King, CEO of BB&T (Ticker: BBT)
“While I was sitting there I was thinking I should raise my hand and say ‘I will wire you back the (TARP) money if you let me leave right now.’” – Jamie Dimon, CEO of JPMorgan Chase (Ticker: JPM) after a congressional hearing in February.
“In hindsight, it was a tactical mistake because it put us in the same category as Citigroup.” – Ken Lewis, CEO of Bank of America (Ticker: BAC) on the $20 billion in TARP funding he requested.
I can’t blame them for wanting out of TARP. I want them out of TARP, too.
TARP money came in handy. It was emergency funding without the typical lengthy underwriting process.
But, if they had been handling their business before, then they wouldn’t have had to request (or in some cases, accept) the money anyway.
I want to see what will happen in the post-TARP banking world. Once the money is repaid, how will they return to normalcy. After a plan like TARP, what will normalcy mean for banks?
