EXCLUSIVE FIRST LOOK: BROWN RIPS BIG BANK “SUBSIDIES”
From prepared remarks to be delivered by Sen. Sherrod Brown (D-Ohio) at this morning’s Senate Banking subcommittee hearing on government “subsidies” for the nation’s largest banks: “[I]t should come as no surprise that the Congressional Oversight Panel for TARP found that the six biggest Wall Street banks received a total of $1.27 trillion in government support, including accounting for 63 percent of the Fed’s average daily lending. There are important lessons in this first [GAO] report … First, megabanks borrowed at a discounted rate against assets that the market was not accepting. And the result is a subsidy for the megabanks. …
“The GAO report … also confirms that Treasury paid substantially more than market value for the assets it purchased. The Congressional Oversight Panel estimated that this provided the six biggest megabanks with a subsidy of $25 billion. … I expect that the second report will show that the government’s implicit support enables Wall Street banks to borrow on favorable terms from the market in ordinary times. … The largest Wall Street banks are so much larger and more concentrated than they have ever been. .. And because of their size, they receive financial benefits that are not available to regional and community institutions.”
http://www.politico.com/morningmoney/
From prepared remarks to be delivered by Sen. Sherrod Brown (D-Ohio) at this morning’s Senate Banking subcommittee hearing on government “subsidies” for the nation’s largest banks: “[I]t should come as no surprise that the Congressional Oversight Panel for TARP found that the six biggest Wall Street banks received a total of $1.27 trillion in government support, including accounting for 63 percent of the Fed’s average daily lending. There are important lessons in this first [GAO] report … First, megabanks borrowed at a discounted rate against assets that the market was not accepting. And the result is a subsidy for the megabanks. …
“The GAO report … also confirms that Treasury paid substantially more than market value for the assets it purchased. The Congressional Oversight Panel estimated that this provided the six biggest megabanks with a subsidy of $25 billion. … I expect that the second report will show that the government’s implicit support enables Wall Street banks to borrow on favorable terms from the market in ordinary times. … The largest Wall Street banks are so much larger and more concentrated than they have ever been. .. And because of their size, they receive financial benefits that are not available to regional and community institutions.”
http://www.politico.com/morningmoney/
