The financial industry has suffered the most severe blow to its image in generations. Everything from TARP bailouts to multi-billion dollar ponzi schemes has left consumers reeling from a loss of trust and confidence in banks.
That is why it’s unfortunate to see this AP article with this headline:
“Where’d the bailout money go? Shhhh, it’s a secret.
$350 billion later, banks won’t say how they’re spending it.”
The Associated Press contacted 21 banks that received at least $1 billion in government money and asked four questions:
- How much has been spent?
- What was it spent on?
- How much is being held in savings?
- What’s the plan for the rest?
As one BNET reporter put it, “Dude, where’s my money?”
None of the banks provided specific answers, and no bank provided even the most basic accounting for the federal money.
Instead, banks like JP Morgan expressly declined to discuss what they’ve done with their TARP money. The most they’d say is, “We’ve lent some of it. We’ve not lent some of it.”
That’s too bad. These banks missed a real opportunity to rebuild trust and confidence. It’s not that they are obligated to conduct dollar-in/dollar-out tracking of their capital — even taxpayer money, in this case. But if these banks want to help rebuild their image and that of their industry, next time they’ll think twice about being less secretive and more transparent in the future.
“If they’re not more forthcoming about how they’re spending this taxpayer-funded aid,” wrote the BNET reporter, “Banks are on the path to further losing their customers’ respect, regard — and business.”