Wall Street’s biggest banks are now the biggest beneficiaries of a $1 trillion bailout
With its $1.2 trillion bailout of its biggest banks last year, the Federal Reserve Board is taking a major step toward helping those banks with a massive infusion of taxpayer dollars.
But that is likely to require a massive public-relations overhaul that could cost billions.
Read moreHere’s how the rescue unfoldedThe Federal Reserve’s board has approved more than $1 billion in taxpayer support for banks that were the most vulnerable to the financial crisis and its aftermath.
The banks were able to borrow at a lower interest rate than in previous years, so they could pay off their debt.
That helped offset the pain of the 2008 financial crisis, and helped boost their profitability.
But in the wake of the financial collapse, banks are increasingly worried about their profitability and how to keep lending at a high level.
Fed officials also plan to use that money to help smaller banks with debt.
In a draft report released Wednesday, the Fed acknowledged that a portion of the bailout will be earmarked for small banks that don’t have enough capital to meet the federal lending standards.
These banks have more than 3,500 branches in the U.S., and some have seen their lending grow significantly since the bailout began.
But many are concerned that the bailout could affect the banks’ ability to lend money to consumers.
“The big banks are going to have to find a way to compete in the economy,” said Stephen Zemsky, a former senior adviser at the Treasury Department.
“But if they can’t compete with smaller banks, then it will impact their ability to raise money.”
In an effort to combat the concerns, the administration is working with the banking industry to develop a set of guidelines to help banks deal with the changes in their business model.
The banking industry is expected to receive the first draft of those guidelines in December.
The new guidelines are being developed in response to growing concerns about how the government will treat the $7 trillion bank bailout, which included $2.5 trillion for the biggest banks.
The Treasury Department and the Federal Deposit Insurance Corporation are both overseeing the effort.
In its draft report, the Treasury noted that the banks are struggling to pay down debts and that many of them were able pay down their mortgages in a way that made it easier for them to borrow.
But the Fed said the banks were also not adequately addressing their liquidity problems.
“The failure to manage these problems in a timely manner can be a cause for concern,” the Fed report said.
While the government’s focus has been on the big banks, other big financial institutions have also been struggling.
Banks like Wells Fargo and Morgan Stanley are also being targeted.
The FDIC and the Treasury are both working to identify the banks that will benefit from the bailout, according to the draft report.
Bankers have been reluctant to accept taxpayer support because of concerns about the cost of the aid.
While they could get relief on the terms of the $700 billion bailout, they fear the taxpayer-funded money could be used to buy back stock.
On Thursday, the bank bailout will come under greater scrutiny.
The House and Senate passed a bill in February that would allow the Treasury to spend the funds on other programs that banks can use to address the financial problems.
But it’s unclear how quickly the House and the Senate will pass that bill.
The House voted to approve the bill earlier this month.
But after a Republican leader said it should not pass, Democrats in the House refused to support it.
Democrats also said they would not support the bill if it included money for the Troubled Asset Relief Program, or TARP, which was used to help rescue the financial sector during the crisis.