Citigroup (C) Tops List of Banks Receiving TARP Funds, Bank of America (BAC) Second
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In a new report from the Congressional Oversight Panel that oversees the TARP program, the full impact the federal government made on the financial institutions during the economic crisis was disclosed.
Citigroup Inc. (NYSE: C) topped the list of banks receiving money with a total of $476.2 billion in cash and guarantees. The firm's total federal assistance included $25 billion from the TARP's CPP program, $68.6 billion from the FDIC's TLGP debt issuance program, and $88 billion from the Federal Reserve's TAF liquidity program, among others.
The amount guaranteed to Citigroup was by far the most, as Bank of America Corp. (NYSE: BAC) was next on the list with $336.1 billion in federal aid, while Morgan Stanley (NYSE: MS) came in third on the dubious list at $135 billion.
"Very large financial institutions may now rationally decide to take inflated risks because they expect that, if their gamble fails, taxpayers will bear the loss," the report said. "Ironically, these inflated risks may create even greater systemic risk and increase the likelihood of future crises and bailouts."
The panel also accused the Treasury of not monitoring closely where the money was going and what it was being used for.
"Treasury decided in the TARP‘s earliest days to push tens of billions of dollars out the door to very large financial institutions without requiring banks to reveal how the money was used," the panel said. "As a result, the public will never know to what purpose its money was put."
Citigroup Inc. (NYSE: C) topped the list of banks receiving money with a total of $476.2 billion in cash and guarantees. The firm's total federal assistance included $25 billion from the TARP's CPP program, $68.6 billion from the FDIC's TLGP debt issuance program, and $88 billion from the Federal Reserve's TAF liquidity program, among others.
The amount guaranteed to Citigroup was by far the most, as Bank of America Corp. (NYSE: BAC) was next on the list with $336.1 billion in federal aid, while Morgan Stanley (NYSE: MS) came in third on the dubious list at $135 billion.
"Very large financial institutions may now rationally decide to take inflated risks because they expect that, if their gamble fails, taxpayers will bear the loss," the report said. "Ironically, these inflated risks may create even greater systemic risk and increase the likelihood of future crises and bailouts."
The panel also accused the Treasury of not monitoring closely where the money was going and what it was being used for.
"Treasury decided in the TARP‘s earliest days to push tens of billions of dollars out the door to very large financial institutions without requiring banks to reveal how the money was used," the panel said. "As a result, the public will never know to what purpose its money was put."
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