Audit: Treasury Dept. bailed out dozens of failing banks

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WASHINGTON – Treasury Department officials sent bailout money to dozens of banks with known financial problems, and a growing number of bailed-out banks are struggling to stay afloat, a new government audit says.

Banks seeking money from the $700 billion financial bailout faced different standards depending on which agency regulated them, according to a report Monday from the Government Accountability Office. Some questionable banks got bailouts by persuading Treasury officials to overlook their problems. Others were blocked by regulators from making a case to Treasury.

Officials approved bailouts for 66 banks with known problems, the GAO found. Those banks have fared worse than the others in the program. They were twice as likely to miss dividend payments they owed to Treasury, the report says.

One indication is the dividend payments that banks owe to Treasury. A growing number of banks can't afford them. Regulators say paying would leave the banks dangerously short of cash. One hundred and forty-four banks have missed at least one payment, according to the report, which analyzed the Capital Purchase Program, Treasury's main bank rescue.

Another worrying sign: The number of bailed-out banks on the government's confidential "problem list" is rising. As of June 30, 78 bailed-out banks had problems severe enough to threaten their survival, the GAO said.

Overall, taxpayers will lose about $66 billion on programs funded by the bailout law, according to the latest estimate from the Congressional Budget Office. Most of the losses are from the rescues of auto makers and the insurance conglomerate American International Group Inc.

Its just $66 billion that we are going to lose. Oh well, thats not alot nowdays.....So Im guessing that we are being told that the bailouts worked, even though we lost around $66 billion?

"The number of bailed-out banks on the government's confidential "problem list" is rising." Time will tell. Maybe another bailout is in the mix in the near future? Maybe the bailouts just held some of the banks afloat for awhile until the inevitable crash.

Were the bailouts worth it?

reply to post by buni11687


Were they burning money again? That darn fundamentalist cult, burning money to the union and bank gods.

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