Bank of America raised $19 billion of new equity. It paid the government $45 billion of TARP funds back. To make up the difference, it borrowed $26 billion of new funds from the Fed (at a subsidized rate, no less).

Please show where the new funds are being borrowed. I am seeing it come from sale of existing assets. Considering that LIBOR is 1%, it is very hard to subsidize below that. LIBOR is the rate at which banks borrow from each other. The fed was charging 3.5%. I have checked their SEC filings and saw no such reference to the new source of funds.

But aren’t taxpayers better off now that Bank of America has paid us back?

Not if you thought the control and pay restrictions TARP provided were a good thing.

This is the primary reason why I don’t like BofA from getting out from under a TARP restriction on executive pay. I like getting out from under it due to the warrants and interest rate charged.

If an executive was truly worth the pay being demanded, he would try to negotiate the pay to be nearly 100% in options for a few years, with strike price at current stock price when awarded and vest date 5 years from award with 20% vest increments from award date… no underwater repricing allowed.

If the guy was good, he would be able to get the company back on its feet within that time.. otherwise they are not worth the millions the executives are asking…