[Pen-l] On the Sanctity of Contracts

["Perelman, Michael" <MPerelman@xxxxxxxxxxxx>]

"As the Obama administration completes its examinations of the nation's
largest banks, industry executives are bracing for fights with the
government over repayment of bailout money and forced sales of bad
mortgages."

"Some of the healthier banks want to pay back their bailout loans to
avoid executive pay and other restrictions that come with the money. But
the banks are balking at the hefty premium they agreed to pay when they
took the money."

"Both large and small banks have pressed the Obama administration to
make it less costly for them to exit the bailout program by waiving the
right to exercise stock warrants the banks had to grant the government
in exchange for the loans. At a meeting last month, the chiefs of three
of the largest banks separately asked Mr. Obama to direct the Treasury
not to exercise the warrants..."

Labaton, Stephen and Edmund L. Andrews. 2009. "Showdown Seen Between
Banks and Regulators." (11 April).
http://www.nytimes.com/2009/04/11/business/economy/11bank.html

Michael Perelman
Economics Department
California State University
Chico, CA
95929

530 898 5321
fax 530 898 5901

http://michaelperelman.wordpress.com


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