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Enhanced Deposit Insurance Extended Through 2013

May 21, 2009

Authors

Robert Klingler

Enhanced Deposit Insurance Extended Through 2013

May 21, 2009

by: Robert Klingler

On May 20, 2009, President Obama signed the Helping Families Save Their Homes Act of 2009 (Senate Bill 896).  Among other things, the Act:

  • extended the $250,000 deposit insurance limit through December 31, 2013;
  • extended the length of time the FDIC has to restore the Deposit Insurance Fund from five to eight years;
  • increased the FDIC’s borrowing authority with the Treasury Department from $30 billion to $100 billion;
  • increased the SIGTARP’s authority vis-a-vis public-private investment funds under PPIP (including the implementation of conflict of interest requirements, quarterly reporting obligations, coordination with the TALF program); and
  • removed the requirement, implemented by the American Recovery and Reinvestment Act of 2009, for the Treasury to liquidate warrants of companies that redeemed TARP Capital Purchase Program preferred investments.  The Treasury is now permitted to liquidate such warrants at current market values, but is not required to do so.

This extension does not

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TALF Investments (May update)

May 20, 2009

Authors

Robert Klingler

TALF Investments (May update)

May 20, 2009

by: Robert Klingler

As we have previously discussed, the Term Asset-backed-securities Loan Facility (“TALF”) program of the Federal Reserve and US Treasury has piqued the interest of investors world-wide.  We are receiving multiple inquiries every week about how best to position our clients to benefit from the government program.  If you’re reading this, you likely already know that the TALF program was intended to create an artificial market to replace the “shadow market” of securitized loans that had fueled the US economy for the past decade, and which was largely responsible for its crash.

Since the other similar, and more recently announced PPIP program, has yet to gain any traction and which still raises far more questions than answers, investors seem more ready and willing to test the TALF waters.  It has been reported that the six TALF-eligible transactions announced for the May auction have been six to twelve times oversubscribed

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Summary of Public-Private Investment Program

April 3, 2009

Authors

Andrew Auerbach

Summary of Public-Private Investment Program

April 3, 2009

by: Andrew Auerbach

On March 23, 2009, the U.S. Treasury Department (“Treasury”) announced the details of the Public-Private Investment Program (“PPIP”).  The program is designed to purchase mortgage backed securities and certain troubled loans from U.S. banks.  PPIP is part of the broader “Financial Stability Plan” introduced by President Obama.  The goal of PPIP is to cleanse the balance sheets of U.S. banks of troubled assets as part of the Troubled Asset Relief Program (“TARP”) and to create access to liquidity for banks and other financial institutions in order to cause the extension of new credit.  PPIP is broken up into two key components – the Legacy Loans Program and the Legacy Securities Program.

Legacy Loans Program

The Legacy Loans Program will be launched by Treasury and the Federal Deposit Insurance Corporation (“FDIC”).  The intent of this joint program is to combine (i) private capital, (ii) equity co-investment from Treasury and (iii)

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GAO Report Offers More Clarity

April 1, 2009

Authors

Robert Klingler

GAO Report Offers More Clarity

April 1, 2009

by: Robert Klingler

On March 31, 2009, the Government Accountability Office released its March 2009 report on TARP, as well as an accompanying statement.  Highlights of the report include almost 2,000 applications still being processes for the TARP Capital Purchase Program, another breakdown of how Treasury is spending the TARP funds (including an apparent 45% reduction in TALF), and a little more guidance on the applicable executive compensation limits.

TARP Capital Recipients and Applications

As of March 27, 2009, 272 publicly held institutions, 248 privately held institutions and 12 community development financial institutions had received TARP Capital Purchase Program funding.  Treasury was still in the process of reviewing approval recommendations for 1,190 qualified financial institutions, and more than 750 applicants were still being viewed by the federal bank regulators.  More than 250 financial institutions have withdrawn applications, and no applications have been formally denied by Treasury.

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Imitation is the Sincerest Form of Flattery

March 31, 2009

Authors

Robert Klingler

Imitation is the Sincerest Form of Flattery

March 31, 2009

by: Robert Klingler

On March 31, 2009, the Treasury Department unveiled a completely updated site for the Financial Stability Plan programs (FinancialStability.gov).  Besides requiring visitors to learn an entirely new navigation system to find documents on the site, the new site contains a number of new features that may be of interest to BankBryanCave.com readers:

TALF Primary Dealers

March 27, 2009

Authors

Robert Klingler

TALF Primary Dealers

March 27, 2009

by: Robert Klingler

As of February 11, 2009, those banks qualifying as “primary dealers” were:

  • BNP Paribas Securities Corp.
  • Bank of America Securities LLC
  • Barclays Capital Inc.
  • Cantor Fitzgerald & Co.
  • Citigroup Global Markets Inc.
  • Credit Suisse Securities (USA) LLC
  • Daiwa Securities America Inc.
  • Deutsche Bank Securities Inc.
  • Dresdner Kleinwort Securities LLC.
  • Goldman, Sachs & Co.
  • Greenwich Capital Markets Inc.
  • HSBC Securities (USA) Inc.
  • J. P. Morgan Securities Inc.
  • Mizuho Securities USA Inc.
  • Morgan Stanley & Co. Incorporated
  • UBS Securities LLC.
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TALF Summary Issues

March 16, 2009

Authors

Robert Klingler

TALF Summary Issues

March 16, 2009

by: Robert Klingler

Since the collapse of Wall Street in October, 2008, and the immediate and severe deleveraging of available capital, the life-blood of the US economy has contracted from a torrent to a trickle.  The so-called “shadow market” that funded the crippled investment banks are no longer able to leverage their assets at a 40:1 ratio. Many of the very large national banks are reeling, seeing their share prices drop from 50% to 90% in the last six months.  We have often heard questions from those outside of the banking industry asking us “what do the bankers want?”  The answer is simple.  Banks want borrowers that can repay loans.  It’s that simple and that difficult.  If only there was an influx of credit-worthy borrowers.   If only there were purchasers of the consumer loans.  These exact issues were raised during Chairman Bernake’s 60 Minutes appearance on Sunday, March 15, 2009.

In stepped

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