Banks, Bank Bailout | featured news

Moody's downgraded Bank of America's and Wells Fargo's long-term ratings and the short-term ratings of Citigroup, saying it believes the U.S. government is less likely to support the banks if needed.

Mortgage finance giant Freddie Mac FMCC.OB said on Monday it would ask for an additional $1.5 billion from taxpayers due to losses stemming from the weak housing market.

American International Group, the insurer that sold off several major units in its effort to repay its 2008 bailout, plans to keep its once-troubled but now rapidly growing mortgage-insurance unit.

Mortgage finance giant Fannie Mae said it would ask for an additional $5.1 billion from taxpayers as it continues to suffer losses on loans made prior to 2009.

Shares of American International Group Inc fell more than 3 percent on Wednesday after the insurer and the U.S. Treasury sold $8.7 billion worth of stock.

Taxpayers won't foot the bill for raises for the chief executives at any of the four firms—GM, Chrysler, AIG, Ally Financial—still receiving assistance under the federal bank bailout.

A federal watchdog criticized federal regulators' oversight of executive pay packages for top officials at Fannie Mae and Freddie Mac in a report published Thursday. The top six executives at the mortgage giants earned $35 million in the last two years, according to the report from the inspector general of the Federal Housing Finance Agency, which regulates the mortgage giants.

Banks are finally beginning to lend, the big ones that is. Commercial and industrial lending is up this quarter 0.2% from the third quarter, according to Moody's Analytics. That might not sound like much, but it's the first quarterly increase in two years. This is great, right? After all, if banks are lending more to businesses, they can expand and begin to hire. That's true, but this trend reveals something else: the financial crisis has created an environment where big banks are getting bigger, as the small ones struggle.

The Obama administration has begun monitoring the high-level board meetings of nearly 20 banks that received emergency taxpayer assistance but repeatedly failed to pay the required dividends, according to Treasury Department officials and documents. And it may soon install new directors on some of their boards.

The U.S. Troubled Asset Relief Program, which risked $700 billion of government funds to bail out troubled banks and automakers, will cost taxpayers a mere $25 billion, according to an estimate released on Monday by the nonpartisan Congressional Budget Office.