As if investors don’t have enough reason to be wary of the financials, a new cause for concern is coming to light.
Banks don’t know what they’ve done with the bailout money they received from the federal government!
That’s right. Those same banks that were more than willing to take your money (and mine) to prevent their collapse – either can not or will not reveal what they’ve done with those dollars!
What????? That can’t be right? Oh, but it is!
The Associated Press contacted 21 banks that received at least $1 billion in government money and asked four questions:
- How much has been spent?
- What was it spent on?
- How much is being held in savings?
- What's the plan for the rest?
None of the banks provided specific answers. Want the details? We’ve got them. But they aren’t pretty.
Nearly every bank AP questioned - including Citibank and Bank of America, two of the largest recipients of bailout money - responded with generic public relations statements explaining that the money was being used to strengthen balance sheets and continue making loans to ease the credit crisis.
A few banks described company-specific programs, such as JPMorgan Chase's plan to lend $5 billion to nonprofit and health care companies next year. But no bank provided even the most basic accounting for the federal money.