American Bankers Association's Attempts To Expunge The TARP Warrants
By March 31, 2009, four banks out of over five hundred had returned their preferred stock obligations. None of the publicly traded banks had yet bought back their warrants owned by the U.S. Treasury by March 31, 2009. According to the terms of the U.S. Treasury's investment, the banks returning funds can either negotiate to buy back the warrants at fair market value, or the U.S. Treasury can sell the warrants to third party investors as soon as feasible. Warrants are call options that add to the number of shares of stock outstanding if they are exercised for a profit. The American Bankers Association (ABA) has lobbied congress to cancel the warrants owned by taxpayers, calling them an "onerous exit fee." Yet, if the Capital Purchase Program warrants of Goldman Sachs are representative, then the Capital Purchase Program warrants were worth between $5-to-$24 billion as of May 1, 2009. Thus canceling the CPP warrants amounts to a $5-to-$24 billion dollar subsidy to the banking industry at taxpayers' expense. While the ABA wants the CPP warrants to be written off by taxpayers, Goldman Sachs does not hold that view. A representative of Goldman Sachs was quoted as saying "We think that taxpayers should expect a decent return on their investment and look forward to being able to provide just that when we are permitted to return the TARP money."
Read more about this topic: Troubled Asset Relief Program
Famous quotes containing the words american, bankers, association and/or attempts:
“The largest business in American handled by a woman is the Money Order Department of the Pittsburgh Post-office; Mary Steel has it in charge.”
—Lydia Hoyt Farmer (1842–1903)
“...the shiny-cheeked merchant bankers from London with eighties striped blue ties and white collars and double-barreled names and double chins and double-breasted suits, who said “ears” when they meant “yes” and “hice” when they meant “house” and “school” when they meant “Eton”...”
—John le Carré (b. 1931)
“In this great association we know no North, no South, no East, no West. This has been our pride for all these years. We have no political party. We never have inquired what anybody’s religion is. All we ever have asked is simply, “Do you believe in perfect equality for women?” This is the one article in our creed.”
—Susan B. Anthony (1820–1906)
“Good resolutions are useless attempts to interfere with scientific laws. Their origin is pure vanity. Their result is absolutely nil. They give us, now and then, some of those luxurious sterile emotions that have a certain charm for the weak.... They are simply cheques that men draw on a bank where they have no account.”
—Oscar Wilde (1854–1900)