Remember back in the days when Hank Paulson and his cronies were saying that calling the TARP a Wall Street bailout was a misnomer because they were bailing out “main street” also because banks would lend out the new cash? That’s still not happening.
Yesterday the Treasury forked over another $35 billion to the banks, injecting $15 billion of new capital into seven banks and lending Citigroup another $20 billion. There’s no requirement that the money be lent out and these days even that expectation seems to have been dashed. The largest beneficiaries of the government’s generosity with taxpayer money are two banks that have recently completed mergers.
From CNN Money:
The Treasury Department said Monday it had invested $15 billion in another seven banks, including two companies that recently completed takeovers of other banks….
Treasury lends funds to banks in exchange for preferred shares, warrants, and high-paying dividends. The aim: to encourage strapped-for-cash financial institutions to lend more money and provide much-needed liquidity in the financial markets.
As of Monday, the government has injected $187.5 billion into 215 banks.
In the latest round, PNC Financial Services Group, Inc. got the most with a $7.6 billion investment – the eighth-largest such investment to date. PNC recently acquired struggling Cleveland lender National City Corp. In fact, Treasury gave PNC preliminary approval for TARP on the same day that the bank announced it would be purchasing National City for $5.6 billion.
Treasury also gave $3.4 billion to Fifth Third Bancorp . On Nov. 1, Fifth Third acquired failed Freedom Bank from the Federal Deposit Insurance Corp. to the tune of $36 million…
Citigroup got another $20 billion from Treasury Monday, bringing its total to $45 billion. The extra loan was part of a massive rescue package for Citigroup in late November on fears that the bank would cause a systemic failure if it should collapse.
Also on Monday, Treasury sent $2.3 billion to CIT Group, $1.4 billion to SunTrust Banks ( and $412 million more to three smaller local banks.
NOW WATCH: Money & Markets videos
Business Insider Emails & Alerts
Site highlights each day to your inbox.