Analyst view: Obama proposes fee on banks
NEW YORK |
NEW YORK (Reuters) - President Barack Obama on Thursday proposed that major U.S. financial firms pay a fee to help the government recover losses on a bank bailout fund.
The following are analysts' comments on the proposed fee.
BEN WALLACE, ANALYST, GRIMES & CO, WESTBOROUGH MASSACHUSETTS
"The crux of it is ... there's this alleged $120 billion they're going to lose on the TARP. If they're going to lose anything on the TARP, it's going to be on AIG, the auto companies and mortgage initiatives ... The idea you need to fill the TARP hole by taxing the banks -- the concept in general I think is not the best rationale. Basically, they're going to tax the banks for money they lost on GM."
"The very theoretical concept of some type of a risk-adjusted fee or risk-adjusted tax, that does make sense, but it has to be part of a larger program, and the goal shouldn't be to fill a specific hole in the TARP ... I think the FDIC is a better vehicle to do this."
ROBERT ALBERTSON, CHIEF STRATEGIST AT SANDLER O'NEILL, NEW YORK
"It throws some sand into the gears. It's one more thing dragging on the sector, but it's spread over 10 years, so it's not so consequential. It's petty theft from bank balance sheets."
NANCY BUSH, ANALYST, NAB RESEARCH, ANNANDALE, NEW JERSEY
"Obama is channeling Willie Sutton here -- he's going after banks because that's where the money is. How much more can the industry take? If this move were in isolation, that would be fine, but we have derivatives trading changes and a series of other steps that, taken together, will take a material bite out of bank earnings. And you're not going to have a healthy economy without healthy banks.
"The biggest impact will likely be on Goldman Sachs and Morgan Stanley, because they have the most wholesale funding. And a lot of banks that have deposit funding will find ways to pass along their costs from this tax to retail and commercial customers."
(Reporting by Dan Wilchins and Elinor Comlay)
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