US banks are still broken despite all their bailout billions, US Treasury Secretary Timothy Geithner told impatient rescue overseers on Tuesday as they pressed him on when things will get better and how much it will cost.
How well is the mostly spent US$700 billion federal bailout working?
“To date, frankly, the evidence is mixed,” Geithner told a congressionally appointed oversight panel.
Confidence in the program is wearing thin on Capitol Hill. With lawmakers back from their spring break, even bailout supporters are skeptical that Congress — weary of bankers’ bonuses and still-scarce credit — would approve additional bank rescue money if requested.
Geithner’s testimony signaled that the administration was not preparing to ask.
Of the US$700 billion authorized by US Congress for the Troubled Asset Relief Program in October, Geithner said about US$110 billion is left. With about US$25 billion expected to be repaid this year, the total available is about US$135 billion.
Some banks are maneuvering to pay back some of the bailout money, unhappy with the strings attached. But Geithner said that doesn’t mean the government would necessarily accept the repayments.
These questions have to be first answered, he said: “Do the institutions themselves have enough capital to be able to lend and does the system as a whole, is it working for the American people for recovery?” A series of “stress tests” are being administered to banks by the administration to help judge their financial health.
The treasury secretary said that while most banks have more than enough capital to satisfy federal regulators, a combination of factors — including worries about the broader economy and the crushing weight on their balance sheets of bad loans and other toxic securities — was feeding “uncertainty about the health of individual banks.”
That, in turn, “has sharply reduced lending across the financial system” and was holding back economic recovery, he said.
Geithner said efforts by the US President Barack Obama administration to gain legislative authority to more closely regulate sprawling financial institutions like American International Group that are not banks.
Former Republican senator John Sununu of New Hampshire told Geithner that uncertainty over the bank stress tests and the prospect that the government might take a more active shareholder role in bailed-out banks was leaving “more questions unanswered than answered.”
Geithner insisted steps taken by the administration were helping to cushion the economic pain from what he called a continuing “very severe financial crisis, the worst in generations.”
Meanwhile, Nobel laureate economist Joseph Stiglitz said stricter rules on the use of bailout money is needed as well as a signal that there is no more money in the pipeline.
“I think it is imperative that Congress narrow the breadth of this new corporate welfare state,” he told the Joint Economic Committee at a separate hearing. “It is people that we should be protecting, not corporations.”
ROLLER-COASTER RIDE: More than five earthquakes ranging from magnitude 4.4 to 5.5 on the Richter scale shook eastern Taiwan in rapid succession yesterday afternoon Back-to-back weather fronts are forecast to hit Taiwan this week, resulting in rain across the nation in the coming days, the Central Weather Administration said yesterday, as it also warned residents in mountainous regions to be wary of landslides and rockfalls. As the first front approached, sporadic rainfall began in central and northern parts of Taiwan yesterday, the agency said, adding that rain is forecast to intensify in those regions today, while brief showers would also affect other parts of the nation. A second weather system is forecast to arrive on Thursday, bringing additional rain to the whole nation until Sunday, it
LANDSLIDES POSSIBLE: The agency advised the public to avoid visiting mountainous regions due to more expected aftershocks and rainfall from a series of weather fronts A series of earthquakes over the past few days were likely aftershocks of the April 3 earthquake in Hualien County, with further aftershocks to be expected for up to a year, the Central Weather Administration (CWA) said yesterday. Based on the nation’s experience after the quake on Sept. 21, 1999, more aftershocks are possible over the next six months to a year, the agency said. A total of 103 earthquakes of magnitude 4 on the local magnitude scale or higher hit Hualien County from 5:08pm on Monday to 10:27am yesterday, with 27 of them exceeding magnitude 5. They included two, of magnitude
CONDITIONAL: The PRC imposes secret requirements that the funding it provides cannot be spent in states with diplomatic relations with Taiwan, Emma Reilly said China has been bribing UN officials to obtain “special benefits” and to block funding from countries that have diplomatic ties with Taiwan, a former UN employee told the British House of Commons on Tuesday. At a House of Commons Foreign Affairs Committee hearing into “international relations within the multilateral system,” former Office of the UN High Commissioner for Human Rights (OHCHR) employee Emma Reilly said in a written statement that “Beijing paid bribes to the two successive Presidents of the [UN] General Assembly” during the two-year negotiation of the Sustainable Development Goals. Another way China exercises influence within the UN Secretariat is
Taiwan’s first drag queen to compete on the internationally acclaimed RuPaul’s Drag Race, Nymphia Wind (妮妃雅), was on Friday crowned the “Next Drag Superstar.” Dressed in a sparkling banana dress, Nymphia Wind swept onto the stage for the final, and stole the show. “Taiwan this is for you,” she said right after show host RuPaul announced her as the winner. “To those who feel like they don’t belong, just remember to live fearlessly and to live their truth,” she said on stage. One of the frontrunners for the past 15 episodes, the 28-year-old breezed through to the final after weeks of showcasing her unique