No, The Big Banks Have Not “Paid Back” Government Bailouts and Subsidies. The big banks claim that they have paid back all of the bailout money they received, and that the taxpayers have actually made money on the bailouts.
However, as Barry Ritholtz notes: Pro Publica has been maintaining a list of bailout recipients, updating the amount lent versus what was repaid.So far, 938 Recipients have had $607,822,512,238 dollars committed to them, with $553,918,968,267 disbursed. Of that $554b disbursed, less than half — $220,782,546,084 — has been returned.Whenever you hear pronunciations of how much money the TARP is making, check back and look at this list. It shows the TARP is deeply underwater. Moreover, as I pointed out in May, the big banks have received enormous windfall profits from guaranteed spreads on interest rates: Bloomberg notes: “The trading profits of the Street is just another way of measuring the subsidy the Fed is giving to the banks,” said Christopher Whalen, managing director of Torrance, California-based Institutional Risk Analytics.
GAO: Almost Half of Bailed Banks Repaid the Government With Money “From Other Federal Programs” By Matt Stoller, former Senior Policy Advisor to Rep.
Alan Grayson and a fellow at the Roosevelt Institute. You can reach him at stoller (at) gmail.com or follow him on Twitter at@matthewstoller The Government Accountability Office continues its subtle war on the talking point used by Treasury that “TARP made money”. Here’s the GAO, with a report out today. As of January 31, 2012, 341 institutions had exited CPP, almost half by repaying CPP with funds from other federal programs. Much of the government-supplied TARP funding (to small banks) was replaced by the Small Business Lending Fund passed in 2010, which Republicans called “TARP 2.0″. The talking point that the Troubled Asset Relief Program made money for the taxpayer is an important structural argument for the Treasury Department and the political elements in the Obama White House.
Our banking system is still reliant on the government for support. Capital Purchase Program: Revenues Have Exceeded Investments, but Concerns about Outstanding Investments Remain. What GAO Found While repayments, dividends, and interest from institutions participating in the Capital Purchase Program (CPP) have exceeded the program’s original investment disbursements, the number of missed payments has increased over the life of the program.
As of January 31, 2012, the Department of the Treasury (Treasury) had received $211.5 billion from its CPP investments, exceeding the $204.9 billion it had disbursed. Of that amount, $16.7 billion remains outstanding, and most of these investments were concentrated in a relatively small number of institutions. In particular, as of January 31, 2012, 25 institutions accounted for $11.2 billion, or 67 percent, of outstanding investments.
As of November 30, 2011, Treasury estimated that CPP would have a lifetime income of $13.5 billion after all institutions exited the program. Why GAO Did This Study What GAO Recommends. Bailouttallyoct2011CLEAN%20NO%20FORMULAS.