Obama to banks: We want our money back
Obama to banks: We want our money back
Friday 15th January 2010
Barack Obama has announced a new tax on the US banking sector, telling Wall Street it must repay $117 billion (£72 billion) of taxpayers' money.The US president unveiled the tax as his administration attempts to recoup the huge sums used to bailout the institutions at the height of financial crisis.
Public opinion has dramatically turned against Wall Street in the last year or so with many blaming the banking sector for the worst recession seen in decades.
Bonus payments paid by the banks have also angered the US public, especially those paid out despite requiring taxpayers' money to stay afloat.
Announcing the new levy on Thursday, Mr Obama declared: "My commitment is to recover every single dime the American people are owed.
"My determination to achieve this goal is only heightened when I see reports of massive profits and obscene bonuses at the very firms who owe their continued existence to the American people."
The tax is expected only to apply to those firms with assets of more than $50 billion.
Mr Obama said the new measures should not be seen as "punishment" for Wall Street firms, but rather "to prevent the abuse and excess that nearly caused the collapse of many of these firms and the financial system itself".
The scheme is now likely to be included in the budget for the 2011 fiscal year submitted to Congress in early February.
The president's announcement comes as banks prepare to pay out their 2009 bonuses, while new figures put US unemployment in December at ten per cent.
With congressional elections looming this year, the Obama administration is anxious to soothe public anger towards Wall Street. Some Republicans have claimed that such a fee on banks could harm economic recovery. However, most analysts believe that politicians' concerns about retaining their seats in November means that such a measure will be supported by Congress.
The Troubled Asset Relief Program (TARP) was launched in October 2008 after a series of large American banks collapsed. It allocated the US Treasury $700 billion to buy up banks' difficult-to-value "troubled assets", freeing them up to stabilise their balance sheets and start lending.
A Treasury report to Congress submitted on Monday said that the government had so far distributed $372 billion in TARP funds, $165.18 billion of which had been paid back.
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