Who Could Have Imagined?
Thursday 11 April 2013 - Filed under Uncategorized
Who could have imagined that banks that were bailed out with taxpayer money would dick over the taxpayers who saved them? HuffPo:
A government watchdog says that 137 community banks used $2.1 billion from a special fund aimed at boosting lending to small businesses to repay their bailouts from the financial crisis.
A report issued Tuesday by the special inspector general for the Troubled Asset Relief Program says the bailed-out community banks didn’t step up their loans to small business nearly as much as other small banks that weren’t rescued. Some banks that used the small-business lending fund to repay bailouts didn’t increase lending at all, while others increased loans to small business by 25 cents for every $1 from the fund.
Congress created the small-business lending fund in 2010 to encourage banks with less than $10 billion in assets to expand their lending to small businesses. At a time of economic distress, the aim was to help small businesses get capital that had become difficult for them to obtain. The loan program charged the community banks lower interest rates if they used the money for loans to small businesses.
The Treasury Department was authorized to spend up to $30 billion on loans to small banks under the program. Only $4 billion was spent, according to the report by Special Inspector General Christy Romero. Of that, a total $2.7 billion went to the 137 bailed-out banks, which used $2.1 billion of it to repay the higher-interest rescue aid they had received from the government.
For some small banks that received bailouts under the Troubled Asset Relief Program, the small-business lending fund “turned out to be little more than a TARP exit strategy,” Romero said in a statement.
I’ll re-quote the important part just to make the moral of the story clear.
A report issued Tuesday by the special inspector general for the Troubled Asset Relief Program says the bailed-out community banks didn’t step up their loans to small business nearly as much as other small banks that weren’t rescued.
Can we stop bailing out failed institutions that misallocate their resources such that they face going under? Because not only is it immoral to steal hard earned money from the taxpayers in order to keep businesses that take unnecessarily bad risks (even if those risks were highly incentivized by government policy), but it doesn’t fucking work.
2013-04-11 » madlibertarianguy