US Counts Its Bank-Bailout Billions - Europe Still Nurses Losses


Sixteen years after Lehman’s collapse

Unlike in the US, where public funds were repaid years ago, European governments continue to nurse losses on stakes in some of their largest banks.

Even with Commerzbank stock at a 10-year high, the government is still sitting on a €2.1 billion loss.

Under Treasury Secretary Henry Paulson, the federal government forced the biggest US banks to accept state funds as part of its Troubled Asset Relief Program (TARP) in October 2008. 

Some banks went back for more but within two years the government had been largely repaid, in many cases even making a profit. 

When it sold its final shares in Citigroup Inc. in December 2010, the Treasury Department trumpeted a $12 billion realized gain

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“So long as the music is playing, you’ve got to keep dancing. We’re still dancing.” 

Chuck Prince, former chairman and chief executive of Citigroup, interviewed only a month before the music stopped 2007. 

Citigroup chairman Chuck Prince and ABBA: Dance While The Music Still Goes On (englundmacro.blogspot.com)

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Dutch government comes closest to turning a profit on its stake in ABN AMRO Bank NV. 

The state took the bank over completely in December 2008 at a cost of €21.7 billion. Since reintroducing it to the stock market in 2015, the government has raised almost €11 billion

In November 2008, the British government became a 58% majority shareholder of Royal Bank of Scotland – now rebranded NatWest Group Plc – pumping in $60.1 billion cash.

Its shareholding now down to 18%, the government has taken out £29 billion

The only major financial institutions in which the Treasury still has a stake are housing giants Fannie Mae and Freddie Mac. 

Marc Rubinstein Bloomberg 20 september 2024

https://www.bloomberg.com/opinion/articles/2024-09-20/bailout-lessons-europe-nurses-losses-as-us-tallies-its-billions


Marc Rubinstein is a former hedge fund manager. He is author of the weekly finance newsletter Net Interest


Troubled Asset Relief Program

https://en.wikipedia.org/wiki/Troubled_Asset_Relief_Program


Treasury Secretary Henry Paulson of Goldman Sachs

https://www.internetional.se/hmp.htm


In one form or another, the package will surely be passed in the next few days,since the alternative would be the failure of every leading bank in America, the inability of the US Government to honour its guarantees to retail savers and the bankruptcy of many large US corporations, probably including General Motors and Ford.

Anatole Kaletsky, The Times September 30, 2008

https://www.internetional.se/700bnusd.htm


Lehman Brothers

https://internetional.se/lehman911.htm

 

Clause 7 of the Brussels accord states that Europe's bail-out fund (EFSF) will have powers to "intervene in the secondary markets". 

It may fund "recapitalisation of financial institutions through loans to governments" in any EMU country, opening the way for a `Euro-TARP' to rescue banks 

Ambrose Evans-Pritchard 25 July 2011

https://englundmacro.blogspot.com/2011/07/this-is-start-of-liability-union-and.html



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