Posted on Monday, January 18, 2010
The statute creating TARP requires that by 2013 the president proposed a plan that “recoups from the financial industry an amount equal to the shortfall in order to ensure that the TARP doesn’t add to the deficit or national debt.”
President Obama recently proposed a “Bank Tax” essentially because he blames the big banks for causing the crisis through risks they took and benefiting from the mess they created. The proposal can be recapped as follows;
• Levy all financial institutions with $50 billion in assets or more.
• Requires 0.15% of company’s liabilities excluding insured deposits and Tier 1 capital.
• Estimated to yield $9 billion a year for next 10 years. $117 billion in 12 years.
• Won’t impact community banks and small firms
• 60% would come from top 10 big banks.
• Many have already repaid their TARP funds, some never took.
• Government expects to turn $10 billion profit from interest, dividens, sale of stock warrants.
• Most of actual loss some say will be due to automakers.