Andrew Ackerman and Jeffrey Sparshott described in The Wall Street Journal last week the status of the government’s recovery of TARP funds doled out during the bailouts.
Two things struck me:
Treasury has turned a profit on the Capital Purchase Program, the main federal effort to help stabilize financial markets. It invested a little less than $205 billion in 707 banks, and as of mid-February had gotten about $211 billion back.
More than three years after the launch of TARP, the federal government still owns stakes in about 350 banks.
They continued on that last:
While the biggest institutions have long since paid back their rescue funding, many smaller banks have been slow to shed government aid.
The divide in part reflects the difficulties faced by many Main Street banks, often saddled with poorly performing commercial real-estate loans and limited ability to raise new funds. Together with weak regional economies and a tough lending environment, the banks haven’t been able to exit TARP.
Maybe it’s time for the Feds to exit them from TARP. Maybe it’s time to get government out of the way, let these banks fail, and let them recover and move on.