Which Government Agency Provided Money for Bank Bailouts?
February 11, 2014 12:04 PM Subscribe
It's an alphabet soup that doesn't allow for even a relatively straight line between money and banks. The Treasury ultimately provided the money, the Office of Thrift Supervision was supposed to oversee the money, the Federal Deposit Insurance Commission closed banks that didn't qualify for the bailout. But who wrote the check and was ultimately responsible for those banks until they paid the bailout money back?
the federal reserve bank is where money comes from, the treasury just collects and spends it. the ny branch of the fed was intimately involved in the negotiations.
posted by bruce at 12:10 PM on February 11, 2014
posted by bruce at 12:10 PM on February 11, 2014
The U.S. Treasury. The wrote the checks for TARP, the Troubled Asset Relief Program, aka the main mechanism of the bailout. The banks paid them back, the reports they published about whether they were paid back on time are all here.
The Office of Thrift Supervision and the FDIC are normal regulators who oversee bank's adherence to the law in normal times. The bailout was an emergency program that was run through the Treasury. You may be confusing the Office of Thrift Supervision with the Office of Financial Stability, which is a department within treasury specially created to manage the bailout.
posted by Diablevert at 12:11 PM on February 11, 2014 [3 favorites]
The Office of Thrift Supervision and the FDIC are normal regulators who oversee bank's adherence to the law in normal times. The bailout was an emergency program that was run through the Treasury. You may be confusing the Office of Thrift Supervision with the Office of Financial Stability, which is a department within treasury specially created to manage the bailout.
posted by Diablevert at 12:11 PM on February 11, 2014 [3 favorites]
And the Treasury drew the funds from its general fund, which is in effect the bank account of the federal government. (The finances of some programs, most notably Social Security, are accounted through separate trust funds, but most government taxes and outlays go through the general fund.) In addition to the Treasury reports Diablevert pointed to, you may be interested in the Congressionally mandated TARP reports from the Congressional Budget Office and the Office of Management and Budget (beginning on p.30).
posted by Mr.Know-it-some at 12:21 PM on February 11, 2014
posted by Mr.Know-it-some at 12:21 PM on February 11, 2014
Also worth pointing out, the Office of Thrift Supervision has since been dismantled and their responsibilities mostly folded into the OCC, the grand-sounding Office of the Comptroller of the Currency.
posted by skycrashesdown at 4:39 PM on February 11, 2014
posted by skycrashesdown at 4:39 PM on February 11, 2014
Also worth pointing out, the Office of Thrift Supervision has since been dismantled and their responsibilities mostly folded into the OCC, the grand-sounding Office of the Comptroller of the Currency.
A minor clarification to Diablevert and skycrashesdown. The OCC was always the main regulator for banks, The OTS only covered trusts.
posted by JPD at 5:43 PM on February 11, 2014
A minor clarification to Diablevert and skycrashesdown. The OCC was always the main regulator for banks, The OTS only covered trusts.
posted by JPD at 5:43 PM on February 11, 2014
Neither OTS not OCC ever bailed out anyone.
FDIC compensated depositors of failed banks, notably WaMu, up to the insured limits funded by bank deposit insurance premiums, and orchestrated certain bank and bank holding company resolutions. SIPC compensated account holders of failed US brokerages, most notably Lehman, up to the insured limits funded by brokerage deposit insurance premiums
The Federal Reserve System funded the AIG bailout and Bear Sterns subsidized acquisition by JP Morgan via Maiden Lane I, II and III, the non home loan ABS market via TALF, and all bank holding companies via the discount window, by printing money under Fed fiat.
The Treasury funded the bailout of Fannie and Freddie and back stopped the mortgage market with ongoing support of them, and administered TARP and related programs, which notably supported BofA / Merrill, Citigroup, and GM and Chrysler restructurings, as well as many weak regional banks.
posted by MattD at 6:25 PM on February 11, 2014
FDIC compensated depositors of failed banks, notably WaMu, up to the insured limits funded by bank deposit insurance premiums, and orchestrated certain bank and bank holding company resolutions. SIPC compensated account holders of failed US brokerages, most notably Lehman, up to the insured limits funded by brokerage deposit insurance premiums
The Federal Reserve System funded the AIG bailout and Bear Sterns subsidized acquisition by JP Morgan via Maiden Lane I, II and III, the non home loan ABS market via TALF, and all bank holding companies via the discount window, by printing money under Fed fiat.
The Treasury funded the bailout of Fannie and Freddie and back stopped the mortgage market with ongoing support of them, and administered TARP and related programs, which notably supported BofA / Merrill, Citigroup, and GM and Chrysler restructurings, as well as many weak regional banks.
posted by MattD at 6:25 PM on February 11, 2014
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posted by Admiral Haddock at 12:07 PM on February 11, 2014