Comrade Paulson

WASHINGTON, October 30, 2008 (AFP) – A banking industry trade group Thursday voiced concern about government pressure on banks to accept public capital injections “they did not seek and do not need.”

The American Bankers Association (ABA), the largest industry group, said its members were growing increasingly concerned about the Treasury’s Capital Purchase Program, which aims to pump 250 billion dollars in capital into banks to spark more lending and ease a credit crunch.

“Bankers across the country are extremely upset about the manner in which the CPP program is rolling out,” said Ed Yingling, chief executive of the Washington banking association in a letter to Treasury Secretary Henry Paulson.

“These are strongly capitalized, profitable banks that never made one subprime loan. These bankers believe that they are being asked — in some cases pressured — to participate in a program they did not seek and do not need.”

Yingling added that the bankers “see the value in the program to the economy and their communities, but they should not be required to make this critical decision that could affect the very future of their banks in such a tight time frame and with so many uncertainties