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Banks Can't Repay TARP if Not in National Interest   April 20th, 2009
Talk about a prepayment penalty!       


More observations...

Banks that want to pay back the government for bailout money they have received (voluntarily or involuntarily) will only be allowed to pay back the money if it's in the "national interest.

Strong banks will be allowed to repay federal bailout funds, but only if such a move passes a test to determine whether it is in the national economic interest, the Financial Times reported on Sunday, citing a senior U.S. administration official.

The report said banks that had plenty of capital and demonstrated an ability to raise fresh capital from the market should, in principle, be able to repay government funds.

But the judgment would be made in the context of the wider economic interest, the report said.

Some banks were forced to take bailout money they didn't want. In the wake of the government using the bailout money to give itself the power to fire CEOs, establish salary caps, and potentially dictate how much and to whom banks loan money, a number of banks now want to pay back the federal money.

There have been reports in recent weeks that the federal government has not been willing to accept repayment. The above, however, says that banks should "in principle" be allowed to repay the money, but adds a condition "if it's in the national interest."

Can you imagine? Someone forces you to take billions of dollars, uses that money to force you to do what they want, and refuses to take the money back if it determines its not in the "national interest?" It's like a bookie you owe money to who won't let you pay him back, but breaks your legs every week for not paying him back.

It's in the "national interest" for the government to stop forcing banks to take money they don't want.

It's in the "national interest" for the banks to give taxpayer money back to the taxpayers (i.e. government).

It's in the "national interest" for the government to stop trying to micromanage the economy.

And it's definitely in the "national interest" for the government to stop interfering in private companies and making hiring/firing decisions and deciding salaries.

The fact that it's even being reported that there are conditions on whether or not a bank can give the government its money back is insane. It's bad enough that some banks were forced to take money they didn't want and were then subject to arbitrary government meddling. But to suggest that a bank won't be allowed to pay it back unless the government agrees is absurd.

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