jsc173

How Are Banks Spending Bailout Money? Anyone's Guess

How is the TARP investment "being spent?" Hopefully, not at all!

Do you know anything about banking? If you did, you would know that capital (which is what TARP investments are) is not "spent."

Capital is a cushion against future expected and unexpected losses. It isn't spent, it is held.

The spread earned from investing deposits and borrowed funds in loans and other types of investments is what is "spent" on day-to-day operations.

TARP investments, per se, would never be lent out or used to pay salaries or other expenses.

All the TARP investments have done, so far, is replace capital that was burned-off due to unexpected write-downs of non-performing loans and investments.