JP Morgan Chase

By John Terrett in Business on October 16th, 2009
Photo by Getty Images

Ask most people what they were doing a year ago today and they wouldn't remember, but I'll bet former U.S. President George Bush does.

He was explaining his government’s plan to spend billions of U.S. tax payer dollars to prop-up some of Wall Street's biggest banks; it was a massive investment - nationalisation by any other name.

It was deeply embarrassing for the head of a country and political party built on free enterprise, and he looked most uncomfortable as he said:

"This new capital will help healthy banks continue making loans to businesses and consumers and this new capital will help struggling banks to fill the hole created by losses during the financial crisis."

Now, one year on and the banks are making money – lots of it.

By Abid Ali in Business on May 19th, 2009

Governments have spent more than 12.5 trillion dollars trying to rescue the banks from themselves and the global economy from a 1930’s style depression.

They may have been a bit slow of the mark trying to get to grips with the issue, and there certainly have been some mistakes none bigger than former U.S. treasury secretary Henry Paulson’s decision to let Lehman Brothers collapse. But they did step in. And there certainly are signs the economy may have hit the bottom.

Investment banks in the first quarter certainly came up trumps, beating the markets best guess on their earnings.

Losses were not bad as many thought at Citigroup ($966 million) or Morgan Stanley ($578 million).

In the first three months of this year Goldman Sachs ($1.66 billion), JP Morgan Chase ($1.52 billion), Credit Suisse ($1.71 billion) made respectable profits.

Is it time to pay for the clear up? Should governments slap the banks with a windfall tax?

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