THE Obama administration could net more than $100bn (£62bn) with its planned special levy on Wall Street’s giants, it emerged yesterday.
Officials are mulling a levy on America’s top banks to tap into anti-Wall Street sentiment ahead of the earnings season. The scheme has yet to be officially confirmed but is being spun as a way of recouping some of the costs of the Tarp programme and to plug the budget deficit.
Options on how to structure a fee are being discussed, including basing it on the amount of a financial firm’s liabilities. Carmakers and insurer American International Group may be exempt, it is understood, even though they account for most of the bailout losses. The package could be rolled into Barack Obama’s fiscal 2011 budget proposal.
The news comes as top executives from Goldman Sachs, JPMorgan, Morgan Stanley and Bank of America prepare to appear before the US Financial Crisis Inquiry Commission. The first hearing before the 10-member panel into the root causes of the economic meltdown kicks off today.
Meanwhile, figures showed the US Federal Reserve made a record $52bn (£32bn) profit last year. The Fed’s net income rocketed 47 per cent after a programme of aggressive bond purchases and lending. This meant it was able to pay $46bn into the US Treasury – an increase of $14.4bn on the year before and the largest since the US central bank was created in 1914. Most of the profit came from its purchases of US Treasury debt, Fannie Mae and Freddie Mac debt, mortgage bonds and other securities.