Bank of America Plans to Repay TARP Money
One of the biggest things that ordinary Americans have been upset about is the TARP money provided for big banks. As Americans struggle with loan modification, they wonder why it is so easy for big banks — many of which made poor money decisions — to get funding. The good news is, for some banks at least, the money really was a loan. And Bank of America, for one, plans to pay theirs back. MSNBC reports on the move by Bank of America:
Image via Wikipedia
Bank of America Corp. said Wednesday it plans to repay its $45 billion in government bailout funds in the next few days, a move that will help the troubled bank recruit a new CEO.
The bank said in a statement it would use available cash and raise $18.8 billion in capital to repay the money, which it received during the height of the credit crisis last year and after its purchase of Merrill Lynch & Co. earlier this year.
The move comes partially as a way to get out from under the thumb of government regulation and oversight. The TARP funds came with a number of strings attached, and agreements to adhere to strict compensation practices. Being able to recruit a new CEO, since Ken Lewis will retire at the end of the year, is high on the list. And to do that, Bank of America needs to be able to offer a rather large compensation package.
The news comes as a welcome development, since it provides more money for TARP, and lessens the burden on taxpayers. Shareholders are also encouraged by the move, and investors awarded Bank of America yesterday in after hours trading. The news isn’t enough to help stocks struggle out of the red today, though. Stocks are trading slightly lower right now as investors assimilate the latest economic data and consider other issues, and Bank of America just isn’t a big enough win to overcome a disappointing Black Friday.
![Reblog this post [with Zemanta]](http://img.zemanta.com/reblog_e.png?x-id=393d7cfc-f45c-4338-975c-5464b48b7c76)
[...] the next several days, Bank of America plans to repay its TARP money. Many financial institutions received preferential terms with TARP back at the height of the [...]
[...] Barack Obama outlined some measures he hopes will help with job creation going forward. Since Bank of America repaid its TARP funds, and other large banks have repaid some of the money, and more probably will (gets them out [...]