Monday, December 14, 2009

Citigroup's TARP Repayment Good, But It Obviates Government Oversight

So Citigroup is repaying the money federal government - or better stated the American taxpayers - gave the financial institution to keep it afloat. That's good news for the U.S. Treasury, of course. But there's a flip side to those $80 billion coins.

“It's certainly good news that Citigroup is paying back the American taxpayer. But let's look at its reasons," says St. John's University law and business professor Anthony Sabino.

Citigroup, Sabino says, "wants the federal government to back off on its oversight." And the timing - just before the holidays - isn't, he says, exactly coincidental.

"Citigroup wants the freedom to go back to paying its people the way it sees fit, including bonuses. Is that fair, considering the American taxpayer kept Citigroup from collapsing from its own bad loan and investment decisions?"

Sabino says, on principle, it's good that the government will have less of a hand in the private sector now.

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