Back in November, while most American families were struggling to put food on their tables, bailed out bank executives were conferring on their plans for the $700 billion dollars of our taxpayer money. The first $350 billion received, no strings attached, with no requirements to disclose what the money is used for. At a conference held at the Palm Beach Ritz Carlton, an oceanfront luxury hotel, the bankers were wined and dined by investment analysts and enjoyed "evening cocktails by the pool and a golf outing at a nearby country club." (Price of a one night stay at the Ritz Carlton? Anywhere from $399 to $1149.) Interestingly enough, the conference was sponsored by the New York City based investment banking firm, Sandler O'Neill & Partners.
Among the bankers plans for the money? Not likely increased loans to consumers, but plans requiring the services of investment bankers. As reported by Mike McIntire in The New York Times:
Mark Fitzgibbon, research director at Sandler O’Neill & Partners, which sponsored the Palm Beach conference, said banks seemed to be allocating the bailout money for four general purposes: increased lending, absorbing losses, bolstering capital and “opportunistic acquisitions.” He said those approaches made sense from a business perspective, even though they might not conform to popular expectations that the money would be immediately lent to consumers (emphasis added).
Well, of course those approaches make sense to Mr. Fitzgibbon. If the banks immediately lend to consumers, they don't need his services.
And keep in mind it is not only troubled banks receiving bailout money, but healthy banks catering to the wealthy:
Speaking at the FBR Capital Markets conference in New York in December, Walter M. Pressey, president of Boston Private Wealth Management, a healthy bank with a mostly affluent clientele, said there were no immediate plans to do much with the $154 million it received from the Treasury.
“With that capital in hand, not only do we feel comfortable that we can ride out the recession,” he said, “but we also feel that we’ll be in a position to take advantage of opportunities that present themselves once this recession is sorted out.”