No wonder thousands are lining up for TARP money. It’s now one of the only signs of financial health the markets trust these days.
From the Wall Street Journal:
The Treasury Department doesn’t disclose to the public which banks have applied, have been approved or have been rejected for capital. Publicly traded institutions are supposed to get an answer from the government by Dec. 31, with closely held banks told later.
Until then, U.S. banks will continue to be whipsawed by rumours of who will get money and who won’t, analysts say. Those who can’t say they have been approved could face pressure to sell to another bank or line up additional capital from private investors.
A rejection under TARP means “failure within maybe a day, maybe a couple of days,” Rodgin Cohen, chairman of law firm Sullivan & Cromwell LLP, said at a banking conference earlier this month. “It’s hard for me to see how a bank survives if the regulators have said it is not sufficiently viable to be in these programs.”
Assistant Treasury Secretary Neel Kashkari, head of the federal aid program, said Friday it isn’t “a good use of taxpayer money to put taxpayer capital into a financial institution that is going to fail.”
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