Barack Obama announces a fee on banks to recoup state funding, would it work here?

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Mpsox

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President Obama has announced that he will be levying a fee on certain US banks and financial institutions to recoup some of the US Govt bailouts they've got
http://www.reuters.com/article/idUSN1312018920100114

Would or could a similer fee to recoup the money the Irish banks here have got from the the Irish Govt (or will get in the future) work? If so, how could it be structured so that the banks could not simply pass the cost on to the consumer via increasing banking charges/rates and could it be done without jeapordising the banks ability to lend?
 
Re: Barack Obama announces a fee on banks to recoup state funding, would it work here

Well, he certainly had to do something, considering that Goldman Sachs are awarding themelves big bonuses after record profits - which it turns out matches the amount that the US taxpayer has pumped into them!
 
Re: Barack Obama announces a fee on banks to recoup state funding, would it work here


There is no way to do it so that the consumer doesn't end up paying. Thes companies aren't stupid. They will simply find a way to pass on the tax. I am surprised he is going down this road considering that he will penalise banks who have repaid their TARP money with interest (taxpayers made a return of around 23% on their investment in Goldman Sachs) and also banks who didn't touch TARP funds. Tax is a very crude instrument to use to 'punish' an industry. It seems like they are using this to help control leverage or to punish the more leveraged firms. There has to be a better way than this. It smacks of a populist political move. I am interested in the details though
 
Re: Barack Obama announces a fee on banks to recoup state funding, would it work here


I don't know if it would work, but the banks would certainly deserve it.
 
Re: Barack Obama announces a fee on banks to recoup state funding, would it work here

It's a PR stunt to look like banks are being punished. The plan is estimated to retrieve $90 billion over ten years, $9 billion a year. This in an industry where annual bonuses top $100 billion.
 
Re: Barack Obama announces a fee on banks to recoup state funding, would it work here

First while I would suggest that while the US taxpayer made a "profit" on their loan to Goldman Sachs they received a significantly inferior return compared to what Warren Buffett received when he invested in GS. The US government made a venture capital investment in GS and received a bank interest return!

The President's plan is not a PR stunt as the government has indicated that the bank bailout will cost the US taxpayer $117 Billion and this move is designed to recover what is owed over a reasonable period of time. This is not designed to punish anyone but simply to pay back what is due. Unlike in Ireland the US is attempting to hold companies and individuals responsible for their actions in this downturn.
 
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