Bailout money now being used to fund bank mergers




This is a terrible idea and I say this as someone who supported the rescue plan. The last thing we need is more consolidation in the American banking system and having more “too big to fail” institutions. Taxpayers should not be funding business acquisitions which of course also means massive commissions for Wall Street to match businesses together. Unless someone in Congress has made sure that Wall Street will not make a windfall profit on such transactions, they need to step in right away.

Now the Treasury is pouring another $125 billion into small and medium-sized banks, but some analysts contend the program has been transformed to a much more grandiose undertaking that will essentially weed out the weak banks from the strong.

Several of the banks that have received preliminary approval from the Treasury for investments have said they plan to use some of the money for acquisitions, including SunTrust and Regions Financial Corp., both of which expect to receive about $3.5 billion apiece. Even smaller institutions, like Seattle-based Washington Federal Inc., which announced a $200 million commitment from the government, plan to deploy some of the money to expand its retail franchise through acquisitions.

Many analysts believe the investments are being doled out to the strongest financial institutions, with the aim of spurring consolidation among banks and protecting the government from having to salvage some of the industry’s weakest players.


An American in Paris, France. BA in History & Political Science from Ohio State. Provided consulting services to US software startups, launching new business overseas that have both IPO’d and sold to well-known global software companies. Currently launching a new cloud-based startup. Full bio here.

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