National City Wasn't Strong Enough for Bail-Out Consideration
According to Interim Assistant Treasury Secretary Neel Kashkari, National City Bank's application for bailout money was not given serious consideration because the bank was too weak to survive. He said that regulators who screen the bailout appliations decided not to forward National City's.
Testifying Friday in Washington D.C. before the Government Reform Subcommittee on Domestic Policy, which is chaired by Cleveland congressman Dennis Kucinich, Kashkari said it would not be a good use of taxpayer dollars to put money into a financial institution that is going to fail.
Kucinich, however, questioned whether the Treasury looks at the impact of its decisions on regional economies. National City is headquartered in Cleveland, and is expected to have a big impact on the 7,800 local employees.
Pittsburg-based PNC agreed on October 24 to purchase National City for $5.6 billion using money they received as part of the federal bailout package.
Comments
National City Treasury Cover Up
Instead of having to identify some sort of policy for his decision making Neel Kashkari is throwing up the typical smoke and mirrors.
I wish Neel had to justify his statements about National City's strength. Yes they had mortgage related losses, but they didn't have the customer attrition that other banks had. Speculation killed NCC more than anything else.
Personally I'm glad that PNC got NCC instead of the absolutely pathetic offer from US Bancorp. Although I wouldv'e liked a NCC - BB&T merger even more.
If any other banks were paying attention there would be an even better offer put on the table. Five years from now NCC's assets will be worth 5-6x what PNC paid for them.
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