On Monday Oct 3rd nine major banks in the U.S. met at the Treasury Headquarters. On one side of the table sat Treasury Secretary Henry Paulson, who was flanked by Federal Reserve Chairman Ben Bernanke and Federal Deposit Insurance Corporation Shelia Bair. On the other side there were executives of Citigroup, JPMorgan Chase, Wells Fargo, Bank of America, Merrill Lynch, Goldman Sachs, Morgan Stanley, Bank of New York and State Street Bank. The executives were told of the chosen course which is an attempt to shore up consumer confidence. During the meeting they were told of the $250 billion share purchase program. The U.S. Treasury Department and Federal Reserve Bank had each decided to put up $125 billion to start.
In a move that is reminiscent of Don Corleone they were told that they would not be allowed to negotiate. They were also told that they needed to sign onto the program while in the meeting which ended at 6:30. Also during the meeting they were told that it was for the good of the country.
These banks will receive $25,000,000,000 each.
Citigroup had 2007 net earnings of $3,617,000,000.
The average of last five years is $19,260,000,000.
JPMorgan Chase had 2007 net earnings of $15,365,000,000.
The average of last five years is $ 5,770,600,000.
Wells Fargo had 2007 net earnings of $8,057,000,000.
The average of last five years is $7,003,000,000.
These banks will receive $12,500,000,000 each.
The Bank of America had 2007 net earnings of $14,982,000,000.
The average of last five years is $1,849,000,000.
Merrill Lynch had 2007 net earnings of $3,733,000,000.
The average of last five years is $1,849,000,000.
Goldman Sachs had 2007 net earnings of $11,599,000,000.
The average of last five years is $6,408,000,000.
Morgan Stanley had 2007 net earnings of $11,000,000,000.
The average of last five years is $4,105,000,000.
Finally the earnings of the Bank of New York and State Street each received $ 2-3 billion.
The earnings of the Bank of New York and State Street Bank were not located.
Wells Fargo Chairman Richard Kovacevich initially rejected the Treasury Secretary Henry Paulson’s offer. Later the Chairman was told that if he turned the investment down and later found it needed more capital, the government wouldn't be as generous the second time around.
By the end of the day all of the sheets were handed in signed.
They should have also invited the Commissioner of Internal Revenue Douglas Shulman, so that all the made men would be represented.
Take a look at this BBC clip
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