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US Reaps Profit as Banks Pay Back TARP Funds

Fed pulls in $14B from loan programs

By Jason Farago,  Newser Staff

Posted Aug 31, 2009 7:38 AM CDT
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(Newser) – When the government spent some $240 billion last year to help avert financial disaster, the idea of making a profit from the TARP funds invested in teetering banks looked like a long shot. Now, however, profits from eight banks who’ve paid back the cash have totaled some $4 billion, or 15% annualized. Bailouts like those of AIG, Detroit, Fannie Mae and Freddie Mac could still hit coffers hard—but the profits are a “welcome surprise,” the New York Times notes.

“Taxpayers should heave a sigh of relief that the investment in the banks protected them from even more catastrophic losses from more bank failures,” says an expert. Profits in the billions have stemmed from investments in Goldman Sachs and Morgan Stanley, while American Express, Northern Trust, and others have paid taxpayers hundreds of millions.  Meanwhile, the Federal Reserve’s loan programs have brought it profits of some $14 billion, the Financial Times reports.

In this Jan. 12, 2009 file photo, stock prices scroll on the facade of Morgan Stanley headquarters in New York.
In this Jan. 12, 2009 file photo, stock prices scroll on the facade of Morgan Stanley headquarters in New York.   (AP Photo/Richard Drew, file)
Treasury Secretary Timothy Geithner testifies on Capitol Hill in Washington, Wednesday, May 20, 2009, before the Senate Banking Committee hearing on the TARP.
Treasury Secretary Timothy Geithner testifies on Capitol Hill in Washington, Wednesday, May 20, 2009, before the Senate Banking Committee hearing on the TARP.   (AP Photo/Manuel Balce Ceneta)
In this Sept. 25, 2008 file photo, Lloyd C. Blankfein, CEO of Goldman Sachs, speaks at a luncheon at United Nations headquarters.
In this Sept. 25, 2008 file photo, Lloyd C. Blankfein, CEO of Goldman Sachs, speaks at a luncheon at United Nations headquarters.   (AP Photo/David Karp)
Treasury Secretary Tim Geithner participates in a question and answer session with Newsweek editor Jon Meacham, obscured at right, Monday, May 18, 2009, in Washington.
Treasury Secretary Tim Geithner participates in a question and answer session with Newsweek editor Jon Meacham, obscured at right, Monday, May 18, 2009, in Washington.   (AP Photo/Haraz N. Ghanbari)
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COMMENTS
Showing 3 of 13 comments
godawgs
Aug 31, 2009 11:17 AM CDT
@odo you're right we won't know if things would have been worse or not, but the country probably would still have that 700billion plus the other stimulus probably wouldn't have passed, and we still could have enacted the plan but what's done is done.
odowd80
Aug 31, 2009 9:30 AM CDT
@godawgs: you very well could be right. There's no way to know if things would have been worse if nothing was done.
cognitivefilter
Aug 31, 2009 8:27 AM CDT
right?? wake up people

 
Goldman Sachs • Federal Reserve • profits • Morgan Stanley • loans • American Express • investment • Treasury Department • taxpayer money • Northern Trust • TARP

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