Free ride for US banks comes to an end
The US Government’s sensitive treatment of its financial institutions witnessed during the financial crisis appears to have ended, with US President Barack Obama looking to reclaim the taxpayer funds used as lifelines to ailing institutions.
Many of the companies rescued from the brink at the height of the crisis are now posting significantly improved returns, and are perceived by some to be too quickly returning to the ways of the pre-crisis world.
President Obama is now working towards the creation of a ‘financial crisis responsibility fee’ that he wants imposed on the debt of the largest US financial firms, “until the American people are fully compensated for the extraordinary assistance they provided to Wall Street”.
In a scathing assessment of the country’s big financial firms, Obama said his determination to recover taxpayer funds had been heightened by “reports of massive profits and obscene bonuses at the very firms which owe their continued existence to the American people”, many of whom themselves “continue to face real hardship in this recession”.
The fee would be imposed on those affected firms with more than $50 billion in assets, and would be in place for at least 10 years, “but even longer if needed to pay back every penny of TARP”, Obama said.
The statement from the White House said 60 per cent of the recovery revenue would come from the 10 largest financial firms.
Obama wants the fee to come into effect on June 30 this year.
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