Tad Gage

Wall Street Breakfast: Must-Know News

"Banks face mixed messages" is quite an understatement. The Treasury appears to be in a state of confusion about TARP, now the Capital Purchase Program. It started as a bailout, then morphed into capital infusion for well-run banks. In the past two weeks the Treasury has started making funding recipients that were promised capital weeks ago jump through additional and borderline random hoops. Some banks are being asked to come up with matching capital to qualify for funding (wasn't the logic behind TARP to provide liquidity and capital in the face of illiquid markets and scarce capital??), or are being given unclear or no direction about what further assurances or information they need to provide to meet the Treasury's constantly changing target. What was good enough assurance two weeks ago is no longer so today. Sadly, it's many of the well-run community banks that seem to be bearing the brunt of this political fire drill. The big boys got their handout, no questions asked.