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GOVERNMENT TO BANKS: NO FRIENDS WITH BENEFITS.
Tim Geithner is set to decree that if banks want to repay their TARP loans and slip out of the compensation caps and oversight rules that come with government backing, then they'll have to also sacrifice the sweet, sweet lending arrangements the Feds have been giving them through the FDIC. In other words, you can't only leave the government subsidies you don't like.
The bottom line for the banks is that if they want out of TARP, they have to be able to withdraw from all the other sources of emergency public support that the government has given them. If they want the support, then they have to agree to the conditions and regulations that come with TARP. No subsidies without regulations. To put it into more common terms, banks can decide to break up with the government or they can decide to stay together. But they don't get to be friends with benefits.
COMMENTS (3)
Anybody who'd let a banker become a friend with benefits clearly didn't possess the moral clarity and concern for physical integrity needed to be doing the date scene. Date rape with party knockout drugs is a pretty well understood thing. "Special K" is a horse anesthetic, not a breakfast ceral.
Posted by: JimPortlandOR | May 6, 2009 10:00 AM
Good news, but very late in the game.
I feel compelled to give Geithner and friends the benefit of the doubt -- they probably expected their banking buddies to play along. Call me naive, but I certainly didn't expect to show such brazen contempt for civic responsibility and popular opinion.
Posted by: Anonymous | May 6, 2009 12:56 PM
better analogy than romantic relationship is parent-teenager relationship. Mom can feign the upper hand, but that love's unconditional. "I will never let you fail."
Posted by: jf | May 6, 2009 1:57 PM