For me the bigger problem is not about whether or not the money came back, it was the lesson it did not teach these investment banks. And then was the money actually put back towards the debt or was it just reallocated for some other use?
Pharm asls the most important question ' And then was the money actually put back towards the debt or was it just reallocated for some other use? And. we all know the answer. Still of the outcomes I prefer the payback with profit, versus never seeing it again
True but how can we consider it a profit if we had to borrow money to get these funds to begin with and we aren't paying back those borrowers when the money is returned?
First of all, a lot of the larger banks didn't need it in the first place but were forced to take it. Second of all, contrary to popular belief, the intent was not to spur lending. The intent was to bolster capital positions so banks that were already in decent shape (excluding Citi obviously) would be in position to acquire banks that were destined to fail. Banks that were in bad shape never received TARP (excluding Citi and to some extent BofA). When you're going into a recession, you don't start lending a bunch. That's retarded. And, being imprudent with lending got us here in the first place.
