Log In | Register
6 Comments
Printadvertisement
Treasury Secretary Henry Paulson said Monday that government purchases of stock in banks represent an investment that should eventually make money for the taxpayer.
Paulson said the government will own shares in the banks that should be paid back with a reasonable return and the government will also receive warrants for common shares in the banks.
"This is an investment, not an expenditure, and there is no reason to expect this program will cost taxpayers anything," Paulson said at a Treasury briefing on the program. "This program is designed to attract broad participation by healthy institutions and to do so in a way that attracts private capital to them as well."
Paulson said program's goal is to increase investors' confidence in banks and to boost the confidence of the banks, too, so they will "deploy, not hoard, their capital."
He made his comments as he announced a streamlined application process for banks to apply to sell shares to the government by a deadline of Nov. 14.
The application process features a two-page form that banks must fill out and return to their primary regulator who will review it and then foward it to the Treasury Department. Treasury will make the final decision on which institutions will receive stock purchases.
Paulson summoned nine of the country's major banks to the Treasury Department a week ago on Oct. 13 where he pressured them to agree to sell preferred stock to the government. Paulson wanted the largest banks participating to remove any stigma from other banks going to the government to sell stock.
Those firms, which account for 50 percent of the deposits held in the country, will receive $125 billion in stock purchases by the government. The government will use the other $125 billion to purchse stock in potentially thousands of other banks and savings and loans around the country.
Paulson said all stock sales to the government would be announced within 48 hours of their execution.
The $250 billion in direct stock purchases are part of a $700 billion government rescue program for the financial system that Congress passed on Oct. 3.
© 2009 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.
2 Votes- Enjoy this article? Help vote it up the 'Vine.
Published to:
- Martin Crutsinger's Column, All of Newsvine
- Groups: none
- Regions: none
 | ALL BUSINESS: Bank bailouts could spur risk-taking | Associated Press | Tue Oct 14 | 0 |
 | Does The Bailout Pass The Smell Test? | countercurrents.org | Thu Oct 16 | 10 |
| Two big accounting firms chosen for rescue program | Associated Press | Tue Oct 21 | 2 |
- Public Discussion (6)
- Public Discussion (0)
What's this?
Who's leading the conversation?
This visualization below allows you to see the impact that each user
has on the current conversation.
The top row contains the group of users who have had the most impact, the 2nd
row the group of users who have had the 2nd most impact (et cetera).
Users with similar impact are grouped together, and the average score of the group
is shown to the left of the group. The author of the article is also shown on the
left, in their corresponding group.
Each user's score is based on the number of comments the user has made plus the
number of votes their comments have received. The scores are calculated relative
one another, so while their absolute value is not particularly important, their
relative difference does indicate a larger difference in impact on the conversation.
2.4
{"commentId":3531825,"authorDomain":"ezeques"}
In a separate interview on Bloomberg television, Paulson refused to rule out the possibility that some of the $700 billion program could be used to shore up giant hedge funds, largely unregulated pools of investments, or insurance companies.
That's about the time to pack your assault rifle and head to Washington.
{"commentId":3531825,"threadId":"390854","contentId":"2006210","authorDomain":"ezeques"}
- 1 vote
#1 - Thu Oct 16, 2008 1:47 PM EDT{"commentId":3544138,"authorDomain":"quiteshy2004"}
was that an ooooops sorry I crashed the world economy?
{"commentId":3544138,"threadId":"390854","contentId":"2006210","authorDomain":"quiteshy2004"}
#2 - Thu Oct 16, 2008 11:05 PM EDT{"commentId":3591454,"authorDomain":"paullo2"}
When did a Treasury Secretary become Cramer?
{"commentId":3591454,"threadId":"390854","contentId":"2006210","authorDomain":"paullo2"}
#3 - Mon Oct 20, 2008 1:15 PM EDT{"commentId":3591920,"authorDomain":"wpcdias"}
It is sad that there are only 3 comments on this so far. It seems that everyone else is around ranting and raving about the taxpayer doing all the heavy lifting without even trying to understand what the goal of the program is.
Sure, there are many who share the responsibility for the meltdown. In the end, it is still the American and the World Society which is ultimately responsible. We as individuals do not perform due diligence on our own assets leaving it to the "other" guy whom we elected to do our thinking for us after each election. We forget all the unelected bureaucrats who really run the country. The lobbyists are also unelected but we never blame them when they get us the bacon for our state, city, favourite charity or whatever. Citizen representatives represent their constituents and therefore are the final and ultimate lobbyists for us.
The Treasury secretary was nominated by the President and confirmed by the Senate. He was chosen for his expertise and is doing what he is supposed to do. Try to fix the problem. The seeds of our many problems were sown many years ago with good intentions but there are always unintended consequences. Our desire, not need, for ever increasing standard of living has major consequences, intended and unintended. We are now paying the price. What we need to do is get over our anger and work as a people to solve it. To err is human, to be greedy is also human.
{"commentId":3591920,"threadId":"390854","contentId":"2006210","authorDomain":"wpcdias"}
#4 - Mon Oct 20, 2008 1:38 PM EDT{"commentId":3610691,"authorDomain":"ezeques"}
To err is human, to be greedy is also human.
{"commentId":3610691,"threadId":"390854","contentId":"2006210","authorDomain":"ezeques"}
- 1 vote
{"canLink":false,"threadId":"390854","isPrivate":false}
You're in Easy Mode. If you prefer, you can use XHTML Mode instead. |
As a new user, you may notice a few temporary content restrictions. Click here for more info.
Start Tracking
Stop TrackingCOMPANY STUFF:
LEGAL STUFF:
- © 2005-2009 Newsvine, Inc. |
- Newsvine® is a registered trademark of Newsvine, Inc. |
- Newsvine is a property of
