By Rebecca Christie
Jan. 20 (Bloomberg)
The U.S. Treasury, under pressure to revive lending, is demanding monthly reports from the banks that received the most capital from the government’s $700 billion rescue program.
Neel Kashkari, the official who administers the Troubled Asset Relief Program, wrote to Citigroup Inc., Bank of America Corp. and 18 others on Jan. 16 seeking figures on business and consumer loans. Treasury also wanted details on purchases of mortgage-backed and asset-backed securities, according to documents obtained by Bloomberg News. Kashkari will stay for a few months after President-elect Barack Obama is sworn in today.
Obama’s aides criticize outgoing Treasury Secretary Henry Paulson’s approach to rescues as lacking transparency and not doing enough to get credit flowing though the economy. While Paulson has defended the cash injections as having averted a collapse of the financial system, Obama had to pledge changes before lawmakers approved the release of the second $350 billion.
“Banks are becoming the whipping boy for the Treasury’s failed policies,” said Joseph Mason, a Louisiana State University professor in Baton Rouge who previously worked at the Treasury’s Office of the Comptroller of the Currency. “They’re going to continue to face this pressure.”
The Treasury also asked the banks for commentary on their lending activity, to provide “qualitative” updates on trends. In addition, the government wants information on secured lending and underwriting of debt and equities. The first report covers data for October, November and December and is due by Jan. 31. Results will be made public. Subsequent reports will be monthly.
The 20 banks receiving the Treasury’s monthly data request are: Citigroup, Bank of America, JPMorgan Chase & Co., Wells Fargo & Co., Goldman Sachs Group Inc., Morgan Stanley, PNC Financial Services Group Inc., U.S. Bancorp, SunTrust Banks Inc., Capital One Financial Corp., Regions Financial Corp., Fifth Third Bancorp., BB&T Corp., Bank of New York Mellon Corp., KeyCorp, CIT Group Inc., Comerica Inc., State Street Corp., Marshall & Ilsley Corp. and Northern Trust Corp.
(How are the equity prices of the banksters cited performing?
Bank of America -28.97%
JPMorgan Chase & Co. -20.73%
Wells Fargo & Co. -23.82%
Goldman Sachs Group Inc. -18.96%
Morgan Stanley -15.97%
PNC Financial Services Group Inc. -41.40%
U.S. Bancorp -16.27%
SunTrust Banks Inc. -15.07%
Capital One Financial Corp. -4.90%
Regions Financial Corp. -24.22%
Fifth Third Bancorp. -22.28%
BB&T Corp. -11.09%
Bank of New York Mellon Corp. -17.25%
CIT Group Inc. -19.60%
Comerica Inc. -10.29%
State Street Corp. -59.04%
Marshall & Ilsley Corp. -21.26%
Northern Trust Corp. -14.00% )
Advisers to the incoming president called for more accountability from banks that receive taxpayer money.
“Anyone who looks at it has got to be disappointed when they look at what’s happened to lending, has got to think the results have been unsatisfactory,” Lawrence Summers, director- designate of the National Economic Council, said on CBS’s “Face the Nation” program Jan. 18.
Members of the outgoing president’s party have joined in criticism of the Treasury’s handling of the TARP funds.
“My constituents and I myself have not seen the results that we ought to see from it,” Senator Charles Grassley, a Republican from Iowa, said in a Bloomberg Television interview. “I want to send a signal to the new administration not to make the same mistakes that the present administration has done.”