Financial Regulatory Forum

US pay czar caps more salaries at bailed out firms

By Karey Wutkowski and Steve Eder

WASHINGTON/NEW YORK, Dec 11 (Reuters) – The U.S. pay czar on Friday expanded a crackdown on pay packages at four companies rescued with taxpayer money, limiting most cash salaries at $500,000 for a second tier of top earners.

The Treasury Department’s Kenneth Feinberg issued the new limits amid outcries from some companies on a government lifeline that they cannot retain or attract key employees, sending the firms racing for a bailout exit.

He set the compensation structures for the 26th through 100th highest-paid employees at four firms: Citigroup Inc, American International Group, General Motors Co, and GMAC.

Chrysler and Chrysler Financial were exempted during this round of rulings because total pay for their second-tier executives is already under $500,000.

Feinberg, a Washington lawyer appointed by President Barack Obama in June after public anger exploded over high pay at bailout firms, said he granted less than a dozen special exemptions from the cash salary cap.

US Treasury to net $936 million from JPMorgan warrants

WASHINGTON, Dec 11 (Reuters) – The U.S. Treasury Department on Friday said it priced warrants in JPMorgan Chase & Co at $10.75 per warrant in a deal that will bring U.S. taxpayers net proceeds of $936.06 million.

The 88.4 million warrants to purchase common stock in JPMorgan were priced in a modified Dutch auction. The sale marks the disposal of the government’s remaining investment in the banking giant, which the Treasury received last year in exchange for $25 billion in bailout money.

The closing of the warrant sale is expected to occur on or about Dec. 16. Deutsche Bank Securities was the sole bookrunner, with Ramirez & Co., The Williams Capital Group and Utendahl Capital Group co-managing the offering.

Citi could sell $20 billion of shares soon to repay TARP – CNBC

NEW YORK, Dec 9 (Reuters) – Citigroup Inc plans to pay back TARP by raising money in an equity offering that could be announced as early as Thursday and could be some $20 billion, television network CNBC reported, citing sources.

Earlier on Wednesday, the bank’s chairman, Dick Parsons, told CNBC that Citigroup was in talks with regulators about repaying the funds it received from the U.S. Treasury’s Troubled Asset Relief Program.

“We believe Citigroup is in a position to repay the TARP money, but there is an active discussion we have to have with regulators …” said Parsons, who was at New York Governor David Paterson’s speech on the economy on Wednesday at the Museum of American Finance.

U.S. extends bailout fund,sees economic challenges

By David Lawder

WASHINGTON, Dec 9 (Reuters) – U.S. Treasury Secretary Timothy Geithner on Wednesday extended the government’s $700 billion financial bailout fund to October 2010, saying it was still needed for “significant challenges” in the economy.

Geithner, in letters to congressional leaders, pledged to deploy no more than $550 billion from the Troubled Asset Relief Program, allowing the remainder to reduce budget deficits.

The extension, opposed by many Republicans, will allow the Obama administration to tap the financial rescue program for further efforts to fight home foreclosures and to ease credit for small businesses in the hopes of spurring job growth.

Obama pushes plans for more job creation

By Alister Bull and Patricia Zengerle

WASHINGTON, Dec 8 (Reuters) – President Barack Obama on Tuesday offered modest steps to spur jobs and defended his push to get the U.S. economy growing, amid deep public dismay over double-digit unemployment that has eroded his popularity.

Obama proposed small business tax cuts and energy efficiency rebates — a so-called cash-for-caulkers program — to boost jobs, but gave no details on the cost of the action.

He also called for an extension of unemployment and health insurance benefits for the more than 15 million out-of-work Americans, and stressed that reducing the jobless rate was the best way to tackle the country’s record deficit.

U.S. cuts estimate of bank bailout costs by $200 bln

By Glenn Somerville

WASHINGTON, Dec 6 (Reuters) – The projected long-term cost of the U.S. government’s bailout of the nation’s big banks is going to be at least $200 billion less than previously thought, a Treasury Department official said.


TARP watchdog sees loss on U.S. bailout program

WASHINGTON, Nov 12 (Reuters) – The U.S. government’s $700 billion bailout program will “almost certainly” result in an overall loss for taxpayers, a key auditor for the program said on Thursday.


U.S. Fed: 9 of 10 large banks met capital goals

By David Lawder
WASHINGTON, Nov 9 (Reuters) – Nine of 10 large U.S. banks ordered to raise capital in May have met or exceeded their goals and the laggard — auto lender GMAC Financial Services — is negotiating for a fresh infusion of taxpayer funds.


US Treasury will close Capital Assistance Program

WASHINGTON, Nov 9 (Reuters) – The U.S. Treasury Department said on Monday it will immediately close its Capital Assistance Program, set up last spring for bank stress tests, because the only firm needing taxpayer funds will use an auto industry support program instead.


ANALYSIS-Bankers wary of Obama small business lending plan

By Karey Wutkowski
CHICAGO, Oct 27 (Reuters) – Community bankers are responding coolly to the Obama administration’s plan to free up small business lending, saying the programs unveiled last week involve unattractive government capital injections and mountains of paperwork.