The scary thing is actually that a driving force behind banks wanting to get out of TARP seems to be dissatisfaction with some of the regulations such as salary caps and more importantly regulation on bank capitalization. "Some banks, tiring of the strings attached to government aid, are seeking to return TARP funds. However, the Treasury, which has veto power over the repayment, has signaled it might not let some leave the program.
Banks have been lobbying the Treasury to escape their contractual commitment to buy back the warrants at the time they repay the funds. The Senate will likely vote Tuesday on another amendment, offered by Sen. Jack Reed, D-R.I., to remove the repurchase obligation for banks leaving TARP.
Senate Banking Chairman Christopher Dodd, D-Conn., argued that Vitter's proposed criteria for repayment was too broad, and would allow certain banks to return capital they might later need to continue weathering the economic downturn.
"While being well-capitalized is very important, if you limit it to that and that only...you could put at risk the whole economy," Dodd said on the Senate floor."
-By Jessica Holzer, Dow Jones Newswires; 202-862-9228; jessica.holzer@ dowjones.com
When banks want to avoid buying back warrants held by the Treasury Department they are in effect saying "we want to buy back some of our preferred stock to benefit big investors and smaller investors can go have carnal knowledge of themselves."
http://www.mondaq.com/article.asp?articleid=77580
Really nice to see that some players responsible for the current financial mess who got taxpayer dollars are unhappy with earnings restrictions and would like to avoid paying off on some of their more onerous debts. Why oh why can't it just be business as usual? Nice work if you can get it.
__________________
Sweet!