http://www.bizjournals.com/portland/stories/2009/02/16/daily21.html
Quote:
While government leaders were well-intentioned in setting up the Troubled Asset Relief Program, it’s a “lousy program,” U.S. Bancorp CEO Richard Davis said at a business leaders forum Tuesday.
U.S. Bank was told, not asked, to participate in the program, which is a Darwinian attempt to “synthesize” weaker banks into stronger banks through consolidation, Davis said at the forum, held at Thrivent Financial for Lutherans in Minneapolis. U.S. Bank (NYSE: USB) sold $6.6 billion in preferred stock with warrants to the U.S. Treasury in November through its capital purchase program.
“There’s no A, R or P in TARP,” Davis said, adding that “troubled” is the only word in the phrase that’s accurate. “The ‘asset relief program’ has yet to occur.”
The problems with the U.S. Treasury Department’s program are that its goals and rules have changed since its inception last fall, it’s poorly defined and it’s caused collateral damage to healthy banks.
Davis said he would be “darned” if Minneapolis-based U.S. Bank would suffer collateral damage from the government’s “sloppy attempt at nationalizing the [banking] industry.”
U.S. Bank, which has $247 billion in assets, was the sixth-largest commercial bank in the country as of the end of the third quarter of 2008. It has more than 2,500 banking offices in 24 states.
U.S. Bank is Oregon’s largest bank, with 186 branches and more than 4,700 employees statewide. U.S. Bank has 103 branches and 3,925 employees in the Portland metropolitan area.
http://online.wsj.com/article/SB122402486344034247.html
Quote:
It was Monday afternoon at 3 p.m. at the Treasury headquarters. Messrs. Paulson and Bernanke had called one of the most important gatherings of bankers in American history. For an hour, the nine executives drank coffee and water and listened to the two men paint a dire portrait of the U.S. economy and the unfolding financial crisis. As the meeting neared a close, each banker was handed a term sheet detailing how the government would take stakes valued at a combined $125 billion in their banks, and impose new restrictions on executive pay and dividend policies.
The participants, among the nation's best deal makers, were in a peculiar position. They weren't allowed to negotiate. Mr. Paulson requested that each of them sign. It was for their own good and the good of the country, he said, according to a person in the room.
During the discussion, the most animated response came from Wells Fargo Chairman Richard Kovacevich, say people present. Why was this necessary? he asked. Why did the government need to buy stakes in these banks?
Quote:
Mr. Bernanke said the situation was the worst the country had endured since the Great Depression. He said action was for the collective good, an understated appeal. The room was silent as he described the economy's fragile condition.
Mr. Geithner, whose job as New York Fed chief makes him the central bank's main man on Wall Street, delivered the most sobering news. He described how much preferred stock the government was going to buy from each firm. The government would take $25 billion in Citigroup, $10 billion in Goldman Sachs Group Inc., and so on.
The CEOs shot off questions, peppering officials for details about how the share purchases would be structured and how it might constrain them. At one tense moment, Mr. Bernanke jumped in to calm nerves. The meeting didn't need to be confrontational, he said, describing paralysis in the market and the threat that posed to everyone in the room.
U.S. officials argued the plan represented a good deal for the banks: The government would be buying preferred shares, and thus wouldn't dilute their common shareholders. And the banks would pay a relatively modest 5% in annual dividend payments.
The banks were basically forced to take "bailout" money. This is indeed a veiled attempt at nationalization.
Quote:
While government leaders were well-intentioned in setting up the Troubled Asset Relief Program, it’s a “lousy program,” U.S. Bancorp CEO Richard Davis said at a business leaders forum Tuesday.
U.S. Bank was told, not asked, to participate in the program, which is a Darwinian attempt to “synthesize” weaker banks into stronger banks through consolidation, Davis said at the forum, held at Thrivent Financial for Lutherans in Minneapolis. U.S. Bank (NYSE: USB) sold $6.6 billion in preferred stock with warrants to the U.S. Treasury in November through its capital purchase program.
“There’s no A, R or P in TARP,” Davis said, adding that “troubled” is the only word in the phrase that’s accurate. “The ‘asset relief program’ has yet to occur.”
The problems with the U.S. Treasury Department’s program are that its goals and rules have changed since its inception last fall, it’s poorly defined and it’s caused collateral damage to healthy banks.
Davis said he would be “darned” if Minneapolis-based U.S. Bank would suffer collateral damage from the government’s “sloppy attempt at nationalizing the [banking] industry.”
U.S. Bank, which has $247 billion in assets, was the sixth-largest commercial bank in the country as of the end of the third quarter of 2008. It has more than 2,500 banking offices in 24 states.
U.S. Bank is Oregon’s largest bank, with 186 branches and more than 4,700 employees statewide. U.S. Bank has 103 branches and 3,925 employees in the Portland metropolitan area.
http://online.wsj.com/article/SB122402486344034247.html
Quote:
It was Monday afternoon at 3 p.m. at the Treasury headquarters. Messrs. Paulson and Bernanke had called one of the most important gatherings of bankers in American history. For an hour, the nine executives drank coffee and water and listened to the two men paint a dire portrait of the U.S. economy and the unfolding financial crisis. As the meeting neared a close, each banker was handed a term sheet detailing how the government would take stakes valued at a combined $125 billion in their banks, and impose new restrictions on executive pay and dividend policies.
The participants, among the nation's best deal makers, were in a peculiar position. They weren't allowed to negotiate. Mr. Paulson requested that each of them sign. It was for their own good and the good of the country, he said, according to a person in the room.
During the discussion, the most animated response came from Wells Fargo Chairman Richard Kovacevich, say people present. Why was this necessary? he asked. Why did the government need to buy stakes in these banks?
Quote:
Mr. Bernanke said the situation was the worst the country had endured since the Great Depression. He said action was for the collective good, an understated appeal. The room was silent as he described the economy's fragile condition.
Mr. Geithner, whose job as New York Fed chief makes him the central bank's main man on Wall Street, delivered the most sobering news. He described how much preferred stock the government was going to buy from each firm. The government would take $25 billion in Citigroup, $10 billion in Goldman Sachs Group Inc., and so on.
The CEOs shot off questions, peppering officials for details about how the share purchases would be structured and how it might constrain them. At one tense moment, Mr. Bernanke jumped in to calm nerves. The meeting didn't need to be confrontational, he said, describing paralysis in the market and the threat that posed to everyone in the room.
U.S. officials argued the plan represented a good deal for the banks: The government would be buying preferred shares, and thus wouldn't dilute their common shareholders. And the banks would pay a relatively modest 5% in annual dividend payments.
The banks were basically forced to take "bailout" money. This is indeed a veiled attempt at nationalization.
