Citigroup (NYSE:C) was one of the banks posing the highest risk for loss during the government bailout. The bank received a total of $476.2 in cash and guarantees help from the federal government according to a new report issued by the Congressional Oversight Panel which is monitoring the TARP program.
The panel had calculated the total amount of federal aid each bank had received during the bailout from TARP ($25 billion), the Federal Reserve ($88 billion), and the FDIC ($68.6 billion). Citigroup topped the list with Bank of America (NYSE: BAC) in a close second at $336.1 billion received. Morgan Stanley (NYSE: MS) came in third place with $135 billion in federal aid.
The Oversight panel was put together by Congress as a way to supervise TARP funds. The panel is expected to cease its operations within the week. It still has to put out its final report on the bailout of the financial sector. In general, the panel was positive about the government’s attempts to stabilize the global financial system and avoid a second Great Depression. While TARP did provide much of the necessary support in the efforts, it is not the only resource deserving credit.
One large criticism of the TARP program from the panel involved the issuance of billions of dollars to financial institutions without the requirement of banks reporting how the money was used. The result is that no one will ever be sure of how that money was spent. This occurred in the early days of the TARP assistance movement.
Additional criticism allege that the TARP program created a dangerous scenario where banks were not worried about loss as they expected taxpayers will bear the burden of any losses incurred. There was also concern expressed over the Treasury’s intervening assistance to the automotive industry since they were not directly working in the financial system. It was felt the risk in doling out funds to the auto industry had too much failure potential.
Citigroup (NYSE: C) High Up on List of Federal Aid Recipients was created by and is property of American Consumer News.
