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President-elect Barack Obama has vowed to spend $50 billion to $100 billion on a home mortgage foreclosure-prevention effort and would require banks that get TARP funds to lend money, restrict executive pay and curtail dividend payments.
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Curtailing dividend payments would have been the fastest, cheapest way for banks to build up capital.
To raise capital, they could seek new equity investments, retain more earnings, limit dividends and stock repurchases, curtail bonuses or any combination thereof.
Specifically, we should fix the regular income tax to eliminate or curtail the tax loopholes that let rich people avoid tax, especially the lower tax rates on capital gains and dividends.
Hospitals curtail services.
Meanwhile, Russia may curtail exports.
We're going to curtail that.
Both steps require ShoreBank to curtail lending.
And some want to curtail growth further.
But they are having to curtail expenditures.
The offering of preferred stock and the halving of the dividend were expected after Freddie Mac last week posted its biggest quarterly loss ever — $2 billion in the third quarter — and warned that it might need to curtail its business unless it could raise new capital.
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Justyna Jupowicz-Kozak
CEO of Professional Science Editing for Scientists @ prosciediting.com