Kashkari: Banks Using Bailout Cash To Maintain Dividends
Rep. Spencer Bachus (R-Ala.) just asked Treasury's Neel Kashkari, the man in charge of doling out the $700 billion bailout/rescue about banks using bailout money to pay dividends.
Bachus is worried that banks are not using the bailout money to make loans, which is the intent, but rather to buy stuff and pay dividends.
"Contracts are in place now that we've engineered to say banks can't increase their dividends..." Kashkari began.
"I know they can't increase their dividends," Bachus interrupted, "but they are using the money to maintain their dividends, right?"
"That's right," Kashkari said, adding, "We want to attract private capital to healthy banks and wiping away their dividends would drive away private capital."
December 10, 2008; 11:31 AM ET
Categories: The Ticker | Tags: Neel Kashkari, Treasury
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