Treasury Secretary Timothy Geithner invoked his statutory authority last week in a letter to the U.S. Congress.Mr.Geithner notified Capitol Hill that he has extended the Troubled Asset Relief Program,or TARP,until October 3,2010.He does not expect to deploy more than 550 of the 700 billion dollar war chest,and is looking for up to 175 billion in repayments by the end of 2010.Reduced commitments will allow significant resources to pay down the national debt.
Mr.Geithner said the extension will allow continued implementation of housing and small business support programs.He anticipates recovering all but 42 billion of the 364 billion in TARP funds deployed this year.Several banks,such as Bank of America and Goldman Sachs,have already repaid their TARP allotments.Citigroup is planning the repayment of its 20 billion dollar loan from TARP.At 9%,Citi's Tier One capital ratio is the highest in the industry,indicating its ability to repay the debt,in the company's opinion.Citi will sell 17 billion in common shares,plus 3.5 billion in tangible equity units.By 2010,Citi will emerge from the pay restriction regime.
1 comment:
There is one glaring issue with your post and it comes at the end of the first paragraph. Reduced commitments will in fact NOT be used to pay down the defecit but rather be used elsewhere per the Obama Administration's own admission.
If they were planning on paying down the national debt, why would they be placing/spending "unused" funds elsewhere? Why is there talk about a second "smaller" stimulus package instead of using what has not yet been spent from stimulus #1?
Even if monies are used to pay down the national debt, it is the net amount of national debt that counts, and unfortunately that is in the trillions not billions.
President Bush spent too much but President Obama is making Mr. Bush look like a spendthrift.
However, your point on the banks getting out from under this Administration's thumb is an importart point. When businesses feel they are gaining capital from the banks and not the government, it will be a jolt of optimism!!
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