The government is blowing a legitimate chance to show that companies can fail, particularly marginal ones.
CIT is getting a bailout. It appears the only question left is how.
WSJ: Under the plan, regulators would allow CIT to transfer assets from its holding company to its bank in Utah; the Federal Reserve would let CIT pledge some of those assets at its discount window and the company would take steps to refinance some of its existing debt. The package isn’t yet finalised and it remains uncertain whether a deal can be struck.
CIT’s board, which has been meeting regularly in the past few days, met again late Tuesday with the hope of coming to a solution soon, said one person familiar with the matter.
It is unclear what role CIT Chief Executive Jeffrey Peek would have if a deal is reached involving the government, the person said.
The financial position of CIT, a lender to almost a million small and midsize businesses, has weakened in recent days and government officials have come under increasing pressure to find a solution.
Just curious. How do you justify bailing out CIT and not the state of California? Granted, they’re different beasts. But from a utilitarian standpoint, the outcomes aren’t even close. California collapsing would be way worse.
Business Insider Emails & Alerts
Site highlights each day to your inbox.