http://www.cnbc.com/id/40827521Of the 707 banks that received Treasury funding during the Troubled Asset Relief Program, 139 have not made timely payments to their Treasury Department creditors.
A new paper by finance professor Dr. Linus Wilson, of the University of Louisiana at Lafayette, explores the underlying data. Specifically, Wilson looks at how banks that received over $6 billion in Treasury funds have fallen behind on their dividend payments to the government.
In his analysis of the causes of the defaults, Wilson concludes that: "Banks with weaker core capital ratios, more charged off loans, more allowances for loan losses, more non-performing loans, and lower returns on assets are more likely to miss their Troubles Asset Relief Program (TARP) dividends."
I really liked his final quote in the article, one that many should remember:
When I asked Dr. Wilson what conclusions one might draw from that, he sighed. "The government is not a good private equity investor," he said.