Banks Wanting To Repay TARP Money: What’s The Real Reason Behind That?

Repaying TARP seems to be priority #1 for the banks these days, and I’m wondering why. Has the taxpayer already been used and abused? Is there a fear that high-level subpoenas are forthcoming from Gov. Cuomo? Are the hidden activities of the former Treasury Secretary being deep-sixed before a scandal hits? Or, is this merely a public relations gesture on the part of Humungous Bank & Broker?

It strikes me as possible that if $300 billion TARP funds were released and say half these funds were rolled into new money using the standard multiplier of fractional reserve banking, the banks and their insider friends would have quite a stash, say $1 trillion to work with.
http://en.wikipedia.org/wiki/Fractional-reserve_banking

It takes money to make money. If an internal rate of return criterion of say 25% were applied, that resultant trillion dollar advance from TARP would further result in an annual windfall of $250 billion. Just speculating, of course; but, in the back of my mind, there must be a reason why, following release of TARP funds, there didn’t seem to be a notable easing of credit for the business people who needed it. So, where did those funds go? Who profited? If the funds are repaid, will we ever find out?

At this point, I don’t trust anything that the TARP recipients or its creator, Mr. Paulson, would say. Those transactions involved public monies and need to be audited. The public must know what happened.

Now these banks, like Goldman (GS) and Bank of America (BAC), JP Morgan (JPM) and Morgan Stanley (MS), say they are ready to repay, and others are stating they never really needed the money to begin with. Something stinks here.

Subscribe by RSS Subscribe by Email