Thursday, March 5, 2009

The Brave New World of Accountability

This just in from a Reuters report: Banks are having second thoughts about taking our Government's money if strings of accountability are attached. Here are a few tidbits from that report:

Northern Trust Corp (NTRS.O), which has been faulted for treating clients to concerts and fancy food at a recent golf tournament, will return $1.6 billion it took from the $700 billion Troubled Asset Relief Program (TARP), House Financial Services Committee Chairman Barney Frank said.

"The public has the right, for us, to be very tough on how recipients of TARP money spend it," Frank said at a briefing with reporters.

Frank also said U.S. Bancorp (USB.N), the eight-largest U.S. bank, will return $6 billion. The bank received $6.6 billion from the fund.

A growing number of U.S. banks are finding that participating in the bailout program designed to spur lending is more troubled than it is worth.

Three smaller lenders, TCF Financial Corp (TCB.N), Iberiabank Corp (IBKC.O) and Sussex Bancorp (SBBX.O), have in the last week decided to give back TARP money.

Banks have complained about new rules being imposed on them under the new economic stimulus law.

One new rule can limit pay for a bank's 20 top executives, which banks say would make it harder for them to hire and retain top talent.

Horrors! The age of the blank check from Washington is officially over! Presumably, the recognition that the Government would do something in response to that failure of the banking sector to provide the Government Accountability Office with the data necessary to monitor the bailout money they have received, not to mention the eagerness of the New York Attorney General to prosecute such matters before his state's Supreme Court, has put the fear of Barney Frank (a bit more substantive than God) into the banks. Perhaps we are experiencing changes we can believe in!

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