BANKS RUSHING TO PAY BACK TARP MONEY! WHY?
There seems to be a rush on the banks to pay back TARP money that was given to well over 700 plus banks that needed the money to get over the financial meltdown. We could have suffered a major financial catastrophe if the US Government did not step in to save the day. It was the shot that was heard around the world. Other countries had to make extreme decisions to survive and move on from this point. However, we are reading that Citigroup, Wells Fargo, Bank of America, Morgan Stanley, Goldman Sacks along with other banking institutions are paying back the TARP money as much as two years earlier than expected. Why?
The major banks want the US Government out of their personal affairs. They do not want the US Government to dictat their business. However, this is how we got into this mess. Executive pay within the banking industry is under scrutiny. This makes it tough for banks to compete for banking talent. So, it is better to pay back the TARP money to conduct business as usual with no further Government interference.
Another reason to pay back the TARP money is public image. The banks that have paid back the money shows they are stronger and can do business. If a bank continues to dip into the TARP fund, then this shows weakness to everyone. The major banks want the public to view them as strong so they continue to make deposits.
I think this is a great example how Government stunts growth. Yes, I believe the US Government had to save the financial markets in the best interest of our country. However, they start dictating the rules to bypass the free market system. Government will continue to put in controls to protect future Americans. However, there must be a balance between free market and Government to generate jobs to get this economy back on track.
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