When is an insurer not an insurer? When it masquerades as a bank to get some US federal aid.
As corporate and financial America – from car makers to credit companies, insurers and of course banks – scrambles for a piece of the $700bn bailout fund, the ploys to get in on the act are becoming more creative (See recent headlines: “Insurers buy banks in effort to get aid” and “More nonbanks seek thrift status“).
What next? Corporate executives disguising themselves as students to get federal assistance to repay student loans?
If you’re as confused as we are about the nature and extent of the bailout queue, the New York Times has thoughtfully compiled a comprehensive list on the dozens of banks and handful of insurers to have applied for funds from the Treasury Department under its reconfigured Tarp. That’s excluding the car makers and other companies who are trying to argue they deserve some Tarp largesse.
Bottom line so far: The Treasury has committed about $290bn, of which $125bn has been allocated to the nine biggest US banks and investment banks; another $125bn for publicly traded regional banks; and $40bn to expand the existing bailout of AIG.
In the process, it has transferred capital to 30 of these companies and to AIG. More – ah yes, many, many more – are expected to announce their participation in the coming weeks.
______