On Fri, Aug 7, 2009 at 9:23 AM, Jim Devine<[email protected]> wrote: > "lending capital," what's happened is that the Fed (or the U.S. > Treasury) have given money to banks in exchange for "warrants," which > give them the right to buy equity in the bank (claims on assets - > liabilities, i.e., part ownership of the bank). I haven't had enough > coffee, so I don't remember the extent to which the Fed (as opposed to > the Treasury) has gained claims bank equity.
I believe the TARP investments from the Treasury to most banks was in the form of loans i.e. the banks were supposed to repay the Treasury the TARP money along with interest and in addition to all that the Treasury also got warrants. Some banks worked out a different deal e.g. Citi, BoA, AIG where I believe the Treasury did directly obtain some equity interests. > I know that the Fed ended > up with a bunch of bad Bear-Stearns stock in its portfolio, but beyond > that I don't know. If you are referring to the Maiden Lane vehicle, that is not Bear Stearns stock, but some toxic mortgage and other securities from Bear. AFAIK Bear's stock was fully retired following the shot-gun sale to JPM-Chase. -- "I don't read books, but I have friends who do." - George W. Bush _______________________________________________ pen-l mailing list [email protected] https://lists.csuchico.edu/mailman/listinfo/pen-l
