As we already knew (and as I wrote in Bailout Nation), the purpose of forcing all the major was to hide the fact that Citigroup was destitute.
ABC is reporting that former Treasury Secretary Paul O’Neill said that the heads of the major U.S. banks were summoned to Washington and told they were required to take the money “So that those who needed it would not be stigmatized.”
“So they all took the money. Stop and think about that. What was the purpose of this policy? To deceive the people so that the public would not know which banks were in danger of failing? Why didn’t any of the CEO’s, claiming not to need the money, have the courage to refuse?” O’Neill said in an e-mail to ABC News. “If banks now claim they want to return the money because they don’t need it, why do they have to raise new capital to replace the money from we the people in order to repay the government?”
O’Neill said that unfortunately the government is permitted to practice a policy of deception for the greater good of the society.
“Is the public ever going to have clear facts regarding any of the individual institutions?” he said. “For months I have been calling for a public disclosure of all bank assets by rating class, along with facts showing the face value of so-called toxic assets along with the associated current book keeping value and associated reserve account. The public and members of Congress seem to be accepting of the idea that a handful of people in the administration and the Fed should do all of this in secret.”
As we suspected . . .
Banks Feel the Heat to Pay Back Bailout Billions
ABC.com, April 15, 2009