#110 Planet Money: GMAC?s Hail Mary Pass
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vor 16 Jahren
GMAC is on the way to achieving the special distinction of three federal bailouts. The financial institution has already received $12.5 billion in assistance, for which the government has taken a stake of nearly 35 percent in the company.
Columbia economist Charles Calomiris says the GMAC case is a textbook example of the dangers that come with taxpayer bailouts. Calomiris says the government ends up giving money to keep a foundering bank afloat. The bank takes what's known as "resurrection risk," the economic equivalent of football's Hail Mary pass.
There's more. Senior Vice President Paul Merski of the Independent Community Bankers of America says that with government backing in place, GMAC is getting an unfair competitive advantage.
Columbia economist Charles Calomiris says the GMAC case is a textbook example of the dangers that come with taxpayer bailouts. Calomiris says the government ends up giving money to keep a foundering bank afloat. The bank takes what's known as "resurrection risk," the economic equivalent of football's Hail Mary pass.
There's more. Senior Vice President Paul Merski of the Independent Community Bankers of America says that with government backing in place, GMAC is getting an unfair competitive advantage.
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