Banks that have received financial assistance from the US government's TARP scheme have been in a rush to sever all ties with the government to free themselves from the executive compensation restrictions imposed. These institutions have been doing this by drawing in private capital to replace government capital. This recapitalization exercise would not adversely affect their ability to lend to others. However, analysts have pointed out that private lending will not increase without any demand and collateral from private firms.
Citigroup's current capital raising program has hit a snag when it was forced to sell its shares at a price lower than expected, prompting the government to put the sale of its share on hold.
No comments:
Post a Comment