In statements that almost seem impossible to believe, the treasury secretary is now making it clear that banks which received special government bail-outs are NOT even allowed to repay the loans. Not only were many banks forced to accept government funding in 2008, with officials using all manner of threats to cajole reluctant financial institutions to take public money, but now the government refuses to let any of these firms repay the money. It would seem that policy makers see value in forcing companies to remain indebted to them. After all, these loans have given the government unprecedented power to make demands. No bank who's hands are tainted with public bail-outs can ignore ultimatums on executive compensation, or even lending practices.
Anyone considering accepting government funds in the future would do well to remember this. Once you let the government into your business, they will own you. Talk about a deal you can't refuse!
Treasury Secretary Timothy Geithner indicated that the health of individual
banks won't be the sole criterion for whether financial firms will be allowed to
repay bailout funds, a position that might complicate their efforts to give back
In an interview, Mr. Geithner laid out some broad
principles, including the need to consider the overall health of the financial
system and the flow of credit in judging whether banks can repay their