TARP

I'm sure you've heard of TARP, the Troubled Asset Relief Program. Its the first big block of your money the federal government decided to give away to ease the recession. It was supposed to be money made available to banks to keep them solvent. It was first intentioned to help banks that had made too many high risk loans to stay afloat. The government's thought was that it wanted to avert a nationwide banking crisis at all costs. Some banks, like U.S. Bank, refused the money because they didn't need it. As time went on, they were forced to take the money and directed to use it to buy up small weak banks before they failed.
U.S. Bancorp CEO Richard Davis said at a business leaders forum in Minneapolis last Tuesday that it was a "lousy program." The U.S. Treasury told, not asked, U.S. Bank to participate in the program, which is a Darwinian attempt to "synthesize" weaker banks into stronger banks through consolidation. The U.S. Treasury purchased $6.6 billion in preferred stock with warrants from U.S Bancorp in November through its capital purchase program.
"There's no A, R or P in TARP," Davis said adding that "trouble" is the only word in the phrase that is accurate. "The 'asset relief program' has yet to occur." The problems with the U.S. Treasury Department's program are that its goals and rules have changed since its inception last fall, it is poorly defined and it has caused collateral damage to healthy banks. Davis said he would be "darned" if U.S. Bank would suffer collateral damage from the government's "sloppy attempt at nationalizing the [banking] industry." That would be sad.