Interesting article in today’s WSJ: Banks Brace foe Bailout Fee
I think it’s funny, actually. The government wants to impose a fee on banks in order to help pay back the American taxpayer for the costs of TARP. Where does the government think this fee is going to come from? Do they think it is NOT going to be passed on to the banks’ customers (i.e. taxpayers)?
One idea being discussed, is a fee on banks’ liabilities. According to the article, the government claims that this fee will hopefully deter banks from risky behavior. The really funny thing is, it was the GOVERNMENT that wanted banks to make risky loans in the first place through their home ownership pushes and their really low interest rates.
I think this fee has NOTHING to do with repaying for the cost of TARP and everything to do with creating another form of taxation and wealth distribution.
If this fee is being imposed because of anger over bank bonuses, then simply tell banks that bonuses can only be paid in stock (not newly-issued stock either) that can only be cashed in the distant future.
This is a question of the day. What are your thoughts?
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