* US *
2010-05-21 14:28:20 UTC
Lenders Agree to Prop Up Ailing ShoreBank
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By Charlie Gasparino
FOXBusiness Some of the nation's largest banks have agreed to
contribute
enough money to save Chicago-based ShoreBank, the community lender
with
strong ties to the Obama administration, FOX Business has learned.
The banks have agreed to contribute $140 million to bail out the bank,
while
the federal government will donate tens of millions more, according to
people close to the talks. In addition to major Wall Street firms like
Goldman Sachs (GS: 137.41, 0, 0%), which agreed to contribute $20
million to
the bailout effort, as well as Citigroup (C: 3.72, 0, 0%) and JPMorgan
(JPM:
39.02, 0, 0%), General Electric's (GE: 17.23, 0, 0%) GE Capital will
also
contribute $20 million to the rescue effort. All the firms have either
received massive government assistance during the financial crisis or,
in
the case of Goldman Sachs, are facing multiple regulatory
investigations
into their business practices.
The bailout has been controversial. Senior Obama adviser Valerie
Jarrett
served on a Chicago civic organization with a director of the bank,
and
President Obama himself has singled out the bank for praise in lending
to
low-income communities.
But the bank has made its share of bad bets, and some of the Wall
Street
firms that have given money have said they've received political
pressure to
contribute to the bailout of a business that under normal
circumstances
would have been left to fail.
It's still unclear how much the federal government will contribute to
save
the bank because it's unclear exactly how much is needed to save the
institution, which without the bailout would have been taken over by
the
FDIC.
An announcement on the bailout is expected Tuesday morning.
0 Comments Add Comment
You must login or register in order to recommend
this.
ShareThis| Respond to Editor | Print
By Charlie Gasparino
FOXBusiness Some of the nation's largest banks have agreed to
contribute
enough money to save Chicago-based ShoreBank, the community lender
with
strong ties to the Obama administration, FOX Business has learned.
The banks have agreed to contribute $140 million to bail out the bank,
while
the federal government will donate tens of millions more, according to
people close to the talks. In addition to major Wall Street firms like
Goldman Sachs (GS: 137.41, 0, 0%), which agreed to contribute $20
million to
the bailout effort, as well as Citigroup (C: 3.72, 0, 0%) and JPMorgan
(JPM:
39.02, 0, 0%), General Electric's (GE: 17.23, 0, 0%) GE Capital will
also
contribute $20 million to the rescue effort. All the firms have either
received massive government assistance during the financial crisis or,
in
the case of Goldman Sachs, are facing multiple regulatory
investigations
into their business practices.
The bailout has been controversial. Senior Obama adviser Valerie
Jarrett
served on a Chicago civic organization with a director of the bank,
and
President Obama himself has singled out the bank for praise in lending
to
low-income communities.
But the bank has made its share of bad bets, and some of the Wall
Street
firms that have given money have said they've received political
pressure to
contribute to the bailout of a business that under normal
circumstances
would have been left to fail.
It's still unclear how much the federal government will contribute to
save
the bank because it's unclear exactly how much is needed to save the
institution, which without the bailout would have been taken over by
the
FDIC.
An announcement on the bailout is expected Tuesday morning.