The big banks are lobbying the FDIC to be allowed to act as buyers -- even of their own loans -- in the government's troubled asset program, the Wall Street Journal reports. The point of the program is to move troubled assets off of banks' balance sheets, using taxpayer capital and financing from the FDIC. But the banks want to be allowed to both buy and sell. At this point, it's not clear whether the FDIC will allow this -- the program won't get going until later this summer. None of the experts and analysts queried by the Journal seem to think this is a bright idea. One sample:
"Sensible restrictions should be placed on banks, especially those that have received government capital, from investing their own balance sheets in a backdoor effort to reacquire what could be their own assets with an enormous amount of federally guaranteed leverage," said Daniel Alpert, managing director at Westwood Capital LLC, an investment bank.
Other links this morning:
GM-Union Deal Raises U.S. Stake to 70% (WSJ)
Chrysler on Pace for Swift Finish to Restructuring (WaPo)
OCC Chief is Big Banks' Best Friend in Washington (WaPo)