Almost all the very large financial firms that got TARP money have repaid it with Citigroup (NYSE:C) and Wells Fargo (NYSE:WFC) getting their money back to the Treasury just as the year ends. The TARP is considered a success by most analysts because it kept the financial system from collapse in late 2008 and 2009. A great deal of the capital that was at risk has been returned to the taxpayers.
But, fifty-five banks did not make TARP dividend payments in November, according to data given to Reuters by bank research firm SNL
The research shows these 55 firms took $5 billion in TARP capital was only, so the risk of default should not compromise the overall success of the program.
What the data does show is that a number of US banks are still teetering on the edge of insolvency. The FDIC and state bank agencies have closed 140 banks this year. The FDIC said in September that it was out of money and took in $45 billion by getting the banks for which it insures deposits to make early payments on their obligations to the agency. That sum will not be enough if the number of banks not making their TARP dividend payments is any indication.
The crisis might be over for the country’s largest banks, but in the rest of the industry there are still pockets of major weakness.
Douglas A. McIntyre
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