Banks with taxpayer money could buy toxic assets
Fri Apr 3, 2009 7:12pm BST
By Jonathan Stempel and Karey Wutkowski - Analysis
NEW YORK/WASHINGTON (Reuters) - Banks that received billions of dollars of taxpayer money to bolster their capital could place bets on the same toxic assets that got them into trouble in the first place -- and with government support.Treasury Secretary Geithner explained a couple of weeks ago about how in the government plan "banks will have the ability to sell pools of loans to dedicated funds" to "private-sector participants" while "investors will compete to have the ability to participate in those funds and take advantage of the financing provided by the government."
It is unclear whether U.S. regulators will prevent banks receiving government aid from participating as buyers in the $1 trillion Public-Private Investment Program (PPIP)...
Let me get this straight. Geithner's "investors" turn out to be the same banks that can't on their own get rid of their toxic assets. But they think dealing them between themselves is just peachy when staked to a load of taxpayer money.
Uff.
H/T Whiskey Fire.
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