Fed loaned Mississippi banks millions in bailout

The Associated Press reports that the Federal Reserve released a report in December that shed additional light on the banks that accepted bailout money – and the way much each took. In areas like Mississippi, where big money is more visible, banks took bailout money to the tune of numerous millions, according to the Mississippi newspaper The Dispatch. Source for this article – Multiple Mississippi banks took bailout money, says Fed by MoneyBlogNewz.

Lehman collapse causes more short term loans to come from the Fed

After Lehman Brothers disintegrated in Sept 2008, the Federal Reserve started issuing short term loans to banks at what can be called a manic pace. With over 21,000 transactions in the nation, trillions of dollars ended up getting pumped to the financial system. Whether or not taxpayers realized it, they ended up paying banks, financial corporations and foreign central banks. While credit did not dry up totally, the Federal Reserve’s short term loans did not create a vigorous credit market via stimulus dollars.

Giving a handout to a Mississippi bank

There were transparency reports from the Federal Reserve, reports the AP. Many Mississippi banks were named in them. Tupelo-based BancorpSouth, which is the largest bank depending in the state, with $13.6 billion in assets, received eight short term loans – also known as Term Auction Facility (TAF) loans – from the Fed that ranged from $50 million to $300 million. A dozen short term loans between $50 million and $150 million were given to the Jackson, Miss., Trustmark National Bank that has $9.4 billion in assets. One $5 million short term loan from the Fed was given to the Senatobia, Miss., Sycamore Bank.

Stay worry free in Mississippi if you're a banking customer

Don't worry about pulling out your funds if you’re a banker in Mississippi, as outlined by the dean of Else School of Management at Millsaps College in Jackson, Miss., Howard McMillian. All of the short term loans in Mississippi were backed up with collateral and paid with full interest as outlined by the Federal Reserve.

“(The TAF program) was created to meet some short-term liquidity needs, and it had nothing to do with a shortage of capital reserve or anything like that,” said McMillan to the AP. “There’s really no cause for concern.”

Information from

CDispatch

cdispatch.com/news/article.asp?aid=9164