Banks Get $15 Billion Despite Transparency Concerns

Tuesday, January 6, 2009 | Tag Cloud

By WorthyNews Staff

WASHINGTON, D.C. (Worthy News) -- The United States Treasury Department says it has supplied another $15 billion to seven banks through its Capital Purchase Program to help them overcome the worst economic crisis in a generation.

In remarks monitored by Worthy News Tuesday, January 6, the Treasury Department said it already allocated $250 billion as part of a $700 billion dollar rescue package approved by Congress in October.

The Capital Purchase Program was designed to stabilize and strengthen the U.S. financial system by purchasing preferred stock from troubled institutions. Investments have ranged from $1.5 million to $25 billion in support of financial institutions in 41 states and Puerto Rico.

However there has been concern that the investments have done little to make increase confidence in the financial system. Last month, the Associated Press news agency said it contacted 21 banks that received at least $1 billion in government funds asking four pertinent questions: “How much has been spent? What was it spent on? How much is being held in savings? What’s the plan for the rest?”

None of the them would disclose basic information concerning the use of taxpayer money.

Critics of the rescue package have complained of a lack of transparency and  unwillingness of banks to disclose information, adding to concerns over the perceived lack of oversight in the disbursement of bailout money.

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