US government foresees better return on Wall Street rescue
The US Treasury says it expects to recover all but $42 billion of the $370 billion it lent to ailing banks and brokerages after the October 2008 market crash. It now says the portion lent to banks actually showed a slight profit. The bank bailout has been unpopular on Wall Street and among the public since it was pushed through by the administration of former President George W Bush and Congress. The money-men reckon it’s socialism (the US government now owns large chunks of businesses on the Street), while the public paid for it in taxes and want their money back. But Treasury officials also say government lost about $30 billion in payments to keep insurance giant American International Group (AIG) afloat. The new assessment by the Obama administration of the $700 billion bailout is vastly improved from its earlier estimates that $341 billion might have been lost in the Troubled Asset Relief Programme (Tarp). However, officials say government could ultimately lose $100 billion more in new loans to banks, aid to troubled homeowners and credit to small businesses. Read more: The New York Times, Investopedia
Become an Insider