The Banks Massive Government Bailout

The news has been dominated in recent weeks by talk of the massive government bailout of the commercial banking industry. The government didn’t just throw this money around aimlessly, though. Instead, they have slotted the funds for the 9 banks of the bailout, which are all in desperate need of federal help in order to keep their operation viable. So who are these 9 banks of the bailout and what is their current situation looking like? This article will detail each of them.

Bank of America. Bank of America received a $15 billion investment from the federal government. This is one company that has been in trouble for quite some time, as they have seen their entire operation saved by the money provided with the bailout plan. Though they did not get as much money as some of the other banks out there, Bank of America did get enough to survive. What the bailout means for them is that they will have the ability to operate and probably dominate the changing global economy over the next few years.

Wells Fargo. This is one bank that benefitted from a large federal investment. They received $25 billion from the government in an effort to hang on for dear life. Wells Fargo recently purchased the assets of Wachovia when that bank went bad during the last month and the economic bailout has put them in a position to succeed relatively well in the near future. They did not seem to have as many bad loans out there as some of their competitors.

Citigroup. This is a company that, when compared to some of the others, made out pretty well in the economic bailout plan. They got a $25 billion investment from the treasury, which came as a result of their position within the market. While other banks were dropping like flies, Citigroup has been there to purchase them. They stand to survive this financial crisis and hang on into the future.

JP Morgan Chase. This huge banking conglomerate has also been in the business of buying up assets from other banks that are going down the drain. They got $25 billion in help from this bailout plan and seem to have gotten back on solid footing. There was some speculation that this bank would fall under with the economic crisis, but they have managed to do relatively well for themselves since that time.

Goldman Sachs. This bank did not need as much help from the federal government, as they only received $10 billion in the help package. They are prospering, however, as executives announced that more than 400 of the company’s top employees would be receiving huge bonus checks valued at a total amount of $7 billion in the coming months.

Morgan Stanley. The economic buyout has had an interesting impact on Morgan Stanley. They were one of only two investment banks remaining in the United States, but announced along with Goldman Sachs this fall that they would turn into a traditional bank. The bailout has forced them into another mode of operation, but it has not stopped the company completely.

Bank of New York Mellon. This bank received $3 billion in federal assistance and it looks as if they are going to survive the financial crisis. They have a particularly strong position for such a small bank and this money only helped them get on even stronger footing. They are poised to become a player in the commercial banking scene to an extent even greater than what they were.

State Street Corp. This bank received an even smaller amount, getting only $2 billion in money from the federal economic bailout. They were hit particularly hard in some areas because of their focus on industrial banking. Still, this company is global enough that with the help of the government, they are currently in pretty good shape regarding their future.

Merrill Lynch. This bank went into the tank as a result of the financial crisis. They received $10 billion from the federal government, but their assets were purchased by Bank of America for stock in September. They are currently completely under the control of Bank of America.