Another major bank – this time Citigroup – is paying back its government bailout money because it doesn’t like the rules that go along with the bucks. The main rule, of course, is limiting the pay of top management.
Citigroup was one of nearly 700 banks that received bailout money nearly a year ago via the Troubled Asset Relief Program. It got $45 billion, with $20 billion to be paid back and the balance of $25 billion secured by a 34 percent ownership transferred to the U.S. The government is expected to sell that $25 billion investment for about $30 billion.
Now that Citigroup is taking their bat and ball and going home, the only major bank still holding government funds is Wells Fargo. If you recall, Bank of America repaid their loan a week ago. Goldman Sachs and Chase, the other noteworthy large institutions, returned their U.S. treasury loans shortly after receiving them upon discovering the government was putting restrictions on executive pay and dividends, while increasing government oversight.
So what’s the moral of this story?
Banks love rules if they are THEIR rules. But if they are the government’s rules, forget about it! And bank executives continue to prove that even though their institutions are still losing money, they will do whatever is necessary to fatten their wallets.
- Mountain Man
http://www.MountainManandCityGirl.com
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