The angry fee

A White House plan to slap a fee on U.S. banks to cover the cost of the $700 billion bailout was met with the expected skepticism by bank lobbyists this week.

Edward Yingling, president of the American Bankers Association, referred to "yet another burden," that would undermine a critical goal of White House economists, by undercutting the ability of banks to lend money to their customers, The Wall Street Journal reported Tuesday.

Sources have said the Obama administration is considering a fee that would raise at least $120 billion to make up for losses in the $700 billion Troubled Asset Relief Program that stopped a massive implosion among U.S. banks and propped bankers up for huge bonus checks while much of the nation found itself standing in unemployment lines.

White House press secretary Robert Gibbs reiterated Monday Obama was aiming to have the TARP program repaid in full -- as he is required to do by law -- but did not confirm a bank fee was on the way. The concept, however, was met with approval by the Rep. Barney Frank, D-Mass., chairman of the House Financial Services Committee.

"I did know they were thinking about this and I encouraged them," Frank told The New York Times.

But it is a delicate balancing act to find the proper culprit and to levy a suitable punishment. The Securities and Exchange Commission, for example, has decided not to pursue individual executives in the case involving Bank of America's alleged failures to disclose bonus checks or massive losses Merrill Lynch sustained before shareholders voted to purchase the bank last winter. Similarly, the White House has rejected a plan to tax executive salaries specifically -- similar to proposals in Britain and France.

Judge Jed Rakoff in New York, in rejecting a $33 million Bank of America settlement last October as too low, also questioned who would be punished -- the bank executives who allegedly failed to disclose the losses to shareholders or the shareholders who were allegedly duped?

"In our industry, costs are typically passed along to institutions and individual investors, so the burden will likely fall on them," said Timothy Ryan, president of the Securities Industry and Financial Markets Association.

Ryan was referring to a fee to recoup losses in the TARP program, not the case against Bank of America.

The numbers that will put the $120 billion into perspective are due within the next six weeks in fourth quarter reports that will likely fuel the fire with banks setting aside billions of dollars in bonus pay -- that would be individual banks -- to reward staff who survived the fallout.

A Congressional panel, meanwhile, convenes Wednesday charged with exploring the reasons the financial crisis hit in the first place, which may open the door to far greater repercussions if greed on Wall Street is connected directly to increased unemployment and the basket of social issues that ensues.

In market movement Tuesday, the Nikkei 225 index rose 0.75 percent, while the Shanghai composite index in China rose 1.91 percent. The Hang Seng index in Hong Kong dropped 0.38 percent, while the Sensex in India lost 0.59 percent.

In Australia, the S&P/ASX 200 fell 1.03 percent.

In midday trading in Europe, the FTSE 100 in Britain 1.24 percent, while the DAX 30 in Germany dropped 1.37 percent. The CAC 40 in France lost 1.23 percent, while the pan-European DJ Stoxx 50 lost 1.05 percent.