Miss. bailout means millions for banks

The Federal Reserve has been criticized for its lack of transparency, so now the law is catching up. A recent report information which banks took bailout funds, and the way much, reports the Associated Press. In areas like Mississippi, where big money is more visible, banks took bailout money to the tune of many millions, according to the Mississippi newspaper The Dispatch. Source for this article – Multiple Mississippi banks took bailout money, says Fed by MoneyBlogNewz.

More short term loans with Fed after Lehman collapse

In Sept 2008, the Federal Reserve began to do something since the Lehman Brothers disintegrated. Banks got short term loans for ridiculous prices. Trillions of dollars were pumped to the financial system over the course of 21,000-plus transactions nationwide. Foreign central banks, financial corporations and banks all got United States taxpayer dollars. These taxpayers didn't even realize it. While credit did not dry up completely, the Federal Reserve’s short term loans did not create a vigorous credit market via stimulus dollars.

Handouts for the Mississippi banks

Many Mississippi banks were named by the Federal Reserve reports the AP. Tupelo-based BancorpSouth, which is the largest bank depending in the state, with $13.6 billion in assets, received eight short term loans – also known as Term Auction Facility (TAF) loans – from the Fed that ranged from $50 million to $300 million. Trustmark National Bank ($9.4 billion in assets) of Jackson, Miss., received short term loans by the dozen, ranging from $50 million to $150 million. Then there's the Senatobia, Miss., Sycamore Bank. The Federal Reserve gave it one $5 million short term loan.

Don't worry if you bank in Mississippi

Don't worry about pulling out your funds if you are a banker in Mississippi, as outlined by the dean of Else School of Management at Millsaps College in Jackson, Miss., Howard McMillian. The Federal Reserve assures that all short term loans given to Mississippi banks were backed by collateral and paid in full plus interest.

“(The TAF program) was created to meet some short-term liquidity needs, and it had nothing to do with a shortage of capital reserve or anything like that,” said McMillan to the AP. “There’s really no cause for concern.”

Citations

CDispatch

cdispatch.com/news/article.asp?aid=9164