Bair Nips Banks PPIP Plans In The Bud

Sheila Bair may have her failings but being politically tone deaf isn’t one of them. She has ruled out a suggestion that banks be allowed to buy their own assets as participants in the PPIP.

From Bloomberg:

“There should be no confusion: Banks will not be able to bid on their own assets,” Bair said today at a Washington news briefing to discuss first-quarter U.S. bank earnings. There is “no structure” for such purchases, she said.

In case you’re late to this story, the WSJ was out with it last night. Basically, some of the bank industry groups were pushing for banks that elected to participate in the PPIP to be able to buy their own assets. It was if nothing else a display of huge cojones and today received the sort of reception you might expect from the blogs as well as the MSM. 

What really remains to be seen is whether this program ever gets off the ground. It’s a month or so late now and some are saying it will be July before it gets rolling. For her part, Bair refused to even specify a start date. Given recent profitability and the receptiveness of the equity markets, a lot of banks might well decide to pass on the deal as either buyers or sellers, reasoning that things are on firm enough footing to just hang onto the assets.

As screwy as this program has seemed to be from the outset, letting it die a quiet death might be the best course of action.

more:here (original WSJ article)

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