Feb 18, 2009
Obama and Geithner are now cracking down on the banks. They are saying that in order for banks to receive more money from the bailout funds, they will have to cap their pay. They will also be held accountable for where the money is being spent and used.
Okay, let’s back track. What happened to the first round of funds that was distributed while the old administration was running the show? Well, no one really knows. As a result of the government not holding banks accountable, the funds ran out. The public learned of these banks’ continued spending, along with the $18 billion in bonuses that these bank executives earned.
When consumers apply for a loan or a mortgage, their financial past is put under a microscope during the underwriting process. Banks need to know details about the potential borrower’s income, any outstanding debt and financial track records. If this is standard procedure, why aren’t banks subjected to these checks when they ask to borrow money from us?? Why can banks borrow money from public funds and not have to show where it is being used or spent?
Thankfully it looks like Obama and Geithner will not allow this lack of accountability to continue with the second round of funding. With the first round of funding distributed, I have not seen any evidence of credit markets opening back up. So where exactly did the money go? We may never know where the first round of funds were spent. Moving forward, hopefully the public will see evidence of more transparency when it comes to detailing how the rest of the funds are being used.
- Capitol Hill and the Financial Crisis: A Busy Week
- Beneath the Surface: Problems of the TARP
- Obama’s First Primetime Speech: A Stimulus Plan
- Stocks are up Again
- FICO Score – Is it Still Reliable in Today’s Economy?
- Credit Score and Credit Rating – Weekly Round-Up
- Tax Hikes – What It Takes to Plug the US’s Gaping Budget Deficit?
- Geithner’s Plan to Clean Bank’s Toxic Assets
- Timothy Geithner’s Important Role
- Bondholder’s $3 Billion Rescue Not Enough to Shield CIT