The largest banks in the US saved nearly $20 billion in interest payments in 2010 under a little-publicized federal government plan aimed at increasing bank liquidity, The Post has learned.
The Federal Deposit Insurance Corp. plan, known as the Term Liquidity Guarantor Program, or TLGP, exchanged dicey bank debt for FDIC-guaranteed loans.
Citigroup was one of the biggest beneficiaries. Citi Chief Executive Vikram Pandit approved more than $175 billion in TLGP debt, records show.
General Electric’s finance arm came in second, issuing some $130 billon in FDIC-backed debt.
The program was offered by the FDIC under then-chair Sheila Bair as banks were failing in growing numbers and were finding it tough to sell their short-term debt in order to fund themselves.
The figures were calculated by Dr. Linus Wilson, assistant professor of finance in the University of Louisiana’s economics department. The Post reviewed Wilson’s data, which was obtained through a freedom of information request.
In total, banks issued some $618 billion in debt under the TLGP program.