Banking Industry

To paraphrase the Beatles, they should have known better. The Chicago bank Northern Trust, that is, which decided to roll on last week with a round of lavish festivities pegged to its annual golf tournament at the Riviera Country Club in Pacific Palisades. Northern Trust Corp. is a 130-year-old bank that serves mostly an upper-crust clientele -- it claims 20% of the Forbes 400 list among its customers, which may be enough capital on the hoof to pay for the whole bank bailout.

The White House on Thursday raised the prospect that the price tag for bailing out the financial system could more than double to nearly $1.5 trillion. President Obama's fiscal 2010 budget outline, released Thursday, warns that, should economic conditions worsen, an additional $750 billion could be required on top of the $700-billion rescue fund authorized by Congress last fall. "We hope that it will not be necessary," Peter R.

The stock market is supposed to be a bet on the future. The market's verdict so far this year: There is no future. The continuing meltdown in share prices, the worst since the Great Depression, now has become Exhibit A in the political battle between the Obama administration and its harshest critics.

The Obama administration will unveil within the next couple of weeks details of its plan for dealing with the toxic assets that lie at the heart of the financial crisis, Treasury Secretary Timothy F. Geithner said Tuesday. He predicted the plan, calling for federal financing to help private investors buy the bad assets held by banks, would succeed, but he said it would take time to end the crisis.

A growing number of healthy bank chains across the country are bailing out of the $700-billion federal banking bailout program, saying it has tarnished the reputation of banks that took the money and tangled them in unwieldy regulations. When the program began last fall, it was billed by then-Treasury Secretary Henry M. Paulson as an investment in strong banks to make them even stronger.

The Obama administration's long-awaited plan to cleanse banks of rotten investments tied to bad home loans scored a big win on Wall Street on Monday as investors bet that the government may have finally found a way to fix the nagging problem at the core of the financial crisis. The Dow Jones industrial average soared nearly 500 points after Treasury Secretary Timothy F.

To help understand why the Obama administration is pushing for greater financial regulation, it may help to examine the case of Orange County's Ameriquest Mortgage Co., whose dizzying rise was followed by a monumental crash. The company and its affiliates had grown to become the nation's largest subprime mortgage lender when, in January 2006, Ameriquest coughed up $325 million to settle charges it misled borrowers and falsified loan documents.

The Obama administration is proposing the farthest-reaching set of new rules for the financial industry since the Great Depression -- including measures that would for the first time regulate hedge funds and give government the power to seize and dismantle companies deemed a threat to the economy. There is strong support for reform in the wake of last fall's near-meltdown of the global banking system, but several of the measures could trigger fierce resistance from the financial industry.

Five banks have repaid millions of dollars they received from the government's $700-billion financial bailout pot, the Obama administration said Thursday. The Treasury Department, which oversees the bank bailout program, said the banks had returned a total of $353 million. The banks are Iberiabank Corp. of Lafayette, La.; Bank of Marin Bancorp of Novato, Calif.; Old National Bancorp. of Evansville, Ind.; Signature Bank of New York; and Centra Financial Holdings Inc. of Morgantown, W.Va.

Some big banks will need more bailout bucks, President Obama and his aides said Sunday, although it is unlikely the government might need to take over any reeling institution. "We're confident that, yes, some are going to have very serious problems, but we feel that the tools are available to address these problems," senior presidential advisor David Axelrod said.