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Boxer: Banks mustn’t hoard bailout bucks

By Josh Richman
Wednesday, October 29th, 2008 at 5:00 pm in Barbara Boxer, U.S. Senate.

U.S. Sen. Barbara Boxer, D-Calif., fired a warning shot across the banking industry’s bow — and Treasury Secretary Henry Paulson‘s as well — while taking questions at her San Francisco news conference today.

She called for a crackdown on banks that are sitting on or misusing some of the money they got from the $700 billion public bailout of the finaincial industry; the bailout’s intent was to get credit flowing again, but that won’t happen if banks aren’t lending out the public money they just got.

U.S. taxpayers got preferred stock in these financial institutions, Boxer said, and she believes the investment eventually will come back. But she’s disappointed that the government didn’t use its investment to take voting positions in these institutions, and already there are reports that the money isn’t flowing as it should. Paulson must act, she said.

“There’s going to be this oversight, there’s going to be action if Paulson doesn’t do what he said he would do,” she said today, leaving the door open to further Congressional action. “What we giveth, we can taketh away.”

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