Academic

Fed: TARP Money is the Best Kind of Money

By Gordon Smith, Christine, Hurt, Vic Fleischer, Fred Tung, Lisa Fairfax, David Zaring

The Fed's fast-tracking of TARP money as tier 1 capital - that is, the money valued at 100% of its face value, basically, for capital adequacy purposes - was finalized today.  Not too surprising, not really that controversial: government money is good money.  There's a tiny bit of a larger robbing Peter to pay Paul element to all this, though.  What the Fed did means that TARP money - a state program - has been given to ensure that banks can meet their Fed/Basel regulatory requirements - which is also a state program.  Some might call that going through the looking glass, but I call it more proof that we live under a big and complex government.

Full post as published by Conglomerate on May 22, 2009 (boomark / email).