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America’s banking executives are having a tough time. First, they mess things up so badly that they require a humongous federal bailout. No sooner do they get the federal funds than they start complaining about how difficult it is to manage a bank when taxpayers are looking over their shoulders. The logical thing for an executive in such a situation to do would be to make the most strenuous efforts possible to return the bailout funds. Would it surprise you to learn that the bankers complaining most about the shackles that come along with bailout money don’t seem to have much of a sense of urgency about doing so?

In October, Northern Trust, the Chicago-based bank announced it would take $1.5 billion in TARP funds. But now it’s expressing annoyance that members of Congress are teed off about its sponsorship of a golf tournament. The bank, which is in good health, says it didn’t seek the funds but agreed to participate because the government wanted all the major banks to take part. So is Northern Trust making maximum effort to pare expenses, conserve cash, or raise new capital so that it can return the TARP funds and avoid all this scrutiny? Not so much. Last Friday, CEO Frederick Waddell said the profitable bank wanted to repay funds “as quickly as prudently possible.” Last month it declared its regular quarterly stock dividend of 28 cents per share, which costs about $62.5 million per quarter, or $250 million a year—enough to pay down one-sixth of the suddenly onerous obligation.

Bank of America CEO Ken Lewis said that taking an extra round of bailout funds to help digest the acquisition of Merrill Lynch had been a “tactical mistake.” If he had it to do over again, Lewis said, he would have taken $10 billion less. This is rich on many levels. The market, in its wisdom, has decided that Bank of America is worth about $18.5 billion. Let’s do a simple thought experiment. If Bank of America had received $10 billion less in cheap, taxpayer-provided capital to soak up losses at Merrill Lynch, would Bank of America’s stock be a) higher, or b) lower? And the mistake of taking too much TARP capital would seem to be an easily reversible one—Bank of America could pay it back or at least return some fraction of the $45 billion it has received. But Bank of America hasn’t done that, either. In the interview, Lewis said the bank would pay back the taxpayers “as soon as we think things are stabilized.”

Back in February, Morgan Stanley CEO John Mack made similar noises about repaying the $10 billion in TARP funds it had received. “Our intent is to pay it off as soon as it is feasible,” he said. Goldman Sachs CFO David Viniar echoed Mack. But neither Morgan nor Goldman appears to have made a significant move to free up cash to make a down payment. Both continue to pay out quarterly dividends.
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The challenge is that banks have to pay back TARP funds either by generating cash or by issuing new preferred or common stock. And in this environment, issuing new stock is an expensive proposition. Last year, when Goldman sold preferred shares to Warren Buffett, it agreed to pay a huge 10 percent interest rate. And last fall, when Morgan Stanley raised about $9 billion from a Japanese bank, the preferred shares likewise carried a 10 percent dividend.

Of course, it’s not impossible to pay back the TARP funds. Iberia Bank, which received $90 million in TARP funds last December, decided it didn’t want to have the government looking over its shoulder any more than it already was. In late February, CEO Daryl G. Byrd announced that Iberia would pay back the funds with interest by the end of March. “Our board of directors has determined that continued participation in this program is no longer in the best interest of our company and its shareholders,” Byrd said.

In other words, instead of simply complaining about the financial and cultural restrictions imposed on banks by the TARP, Iberia actually did something about it. It’s true that not all financial institutions asked for—or particularly needed—the bailout funds. But most did. Running a bank is a difficult job these days. But bank CEOs are well-compensated for their troubles. And part of the job is making tough choices about the appropriate use of capital and resources.

WASHINGTON (Reuters) – The sanctity of the secret Swiss bank account — an icon of global finance — is under growing pressure in a tax investigation due to come into public view on Wednesday at a U.S. congressional hearing.

Senator Carl Levin, a long-time foe of offshore tax havens estimated to deprive the U.S. government of $100 billion in annual revenues, will convene the hearing before the Senate Permanent Subcommittee on Investigations that he chairs.

Levin will grill Mark Branson, a top officer at UBS AG, over a tax case in which the U.S. government wants the giant Swiss bank to disclose the names of thousands of rich U.S. clients suspected of dodging U.S. taxes.

The Michigan lawmaker told reporters in a briefing on Tuesday that the hearing will also focus on a U.S.-Swiss tax treaty he described as having “very, very limited value.” He said, “You can’t rely on the Swiss. That’s the bottom line.”

Branson will appear before the Senate panel for the first time since UBS last month acknowledged responsibility for helping U.S. clients conceal assets from the U.S. government, which is cracking down on tax dodgers with offshore accounts.

UBS, the world’s largest banker to the rich, also agreed last month to pay a $780 million fine, and to identify some U.S. clients, in a legal agreement that resolved criminal fraud charges that it helped wealthy Americans evade taxes.

U.S. authorities, fearing that the agreement might yield very few names, have since filed a lawsuit against UBS seeking information on as many as 52,000 undeclared accounts.

UBS has said it will fight the lawsuit, arguing that the information sought by the United States is protected by Swiss financial privacy laws. Branson is chief financial officer of UBS Global Wealth Management and Swiss Bank.

Also testifying will be top officials of the U.S. Internal Revenue Service and the Justice Department’s tax division.

LEVIN’S LONG FIGHT

Nearly a third of wealth kept abroad globally is in Swiss banks — an amount estimated at $2.2 trillion, making the Alpine state the world’s biggest offshore center.

Levin’s subcommittee has been probing offshore tax havens for years, taking aim sometimes at tax havens other than Switzerland, including Liechtenstein and the Cayman Islands.

Branson last testified before Levin in July. In that dramatic session, Branson apologized for UBS’ activities and said it would cease offering cross-border private banking through its unregulated units to U.S.-domiciled customers.

Levin and Democratic colleagues this week introduced legislation into Congress to crack down on tax havens. The Obama administration on Tuesday endorsed the bills filed in both the Senate and the House of Representatives. The administration’s support greatly improves the chances of offshore tax legislation becoming law this year, Levin said.

He asked Treasury Secretary Timothy Geithner to join other nations “calling for action to be taken at the G20 meeting in April to clamp down on offshore secrecy jurisdictions that impede tax enforcement.” The global economic crisis is expected to dominate the meeting of the Group of 20 major developed and emerging economies.

The bills introduced by Levin and Texas Rep. Lloyd Doggett would ban patenting of tax avoidance plans; close offshore tax loopholes, including one that lets shell corporations escape U.S. taxes; target dozens of “secrecy jurisdictions” for greater scrutiny; and put a greater burden on U.S. taxpayers to show that their tax arrangements are legitimate.

When he was a senator last year, President Barack Obama co-sponsored similar legislation with Levin.

Bruce Windsor listens Friday as a judge tells him he faces kidnapping and robbery charges.

(CNN) — Bruce Windsor is known as many things: church deacon, soccer coach, father of four. But facing potential financial problems, he’s now known as something else: suspected bank robber.

Police say the 43-year-old owner of a real estate company walked into the Carolina First Bank in Greenville, South Carolina, late Thursday with a mask and a handgun.

In court documents filed Friday, police said he forced two bank employees into an office at gunpoint and demanded money. Police arrived minutes later with the suspect still inside, touching off a tense 90-minute standoff before he released the hostages and surrendered.

His actions were “out of character” for a man who has never been in trouble with the law before, friends and relatives said. His tearful sister, defending him as he stood before a judge, said, “He must have just snapped under the pressure.”

In his initial appearance for a bond hearing, Windsor was in an orange jail jumpsuit, shackled and with his hands cuffed. In a quiet voice, he answered “yes, sir” as the judge explained the charges to him: two counts of kidnapping, one count of robbery and two counts of pointing firearms at a person, charges that could carry more than 30 years in prison if convicted.

A police detective told the judge Windsor said he had been experiencing financial problems. But police spokesman Cpl. Jason Rampey told CNN they could not yet say for certain whether money problems were the motive for the alleged robbery.

His attorney said in court Windsor had been married for 16 years and was the father of four children. Reports say the oldest is 11. Attorney Sidney Mitchell told the judge he was “a model citizen up until yesterday,’ and we’ve obviously got a lot of talking to do with him,” Rampey said.

The judge allowed his family to stand with him during the court appearance. His sister clutched his arm, crying through most of the brief hearing. His wife stood behind him, appearing to rub his back. His pastor at Brushy Creek Baptist Church, where Windsor is a deacon, stood at his side.

His sister told the judge Windsor coaches one of his children’s soccer teams and picks them up every day from school. “He would never, ever hurt his family,” she said in a halting voice.

Sobbing, she said, “I can’t imagine the desperation that must have caused this.” The incident, she said, “doesn’t even register.” Windsor then spoke up, saying, “I’ve never stolen anything in my life.”

But the judge reminded the court “this is a very serious incident,” setting the bail at just over $1.5 million.

On Thursday, SWAT officers surrounded the Carolina First bank as the suspect allegedly made the hostages move with him at gunpoint inside until he surrendered.

Bank owner Art Seaver, who nervously watched the standoff unfold at the scene, met with his employees before they reopened Friday morning for a “time of reflection and a time of healing.”

Asked if everything was back to normal, he told CNN affiliate WSPA, “No. What is normal?”

Two different images of Windsor unfolded the day after the incident. The man his pastor called “one of the best fathers I know, anywhere” and the man court documents said “forced the victims to move with him at gunpoint during the attempted robbery. The victims were held by the accuser against their will for over an hour.”

Rampey said Greenville’s crisis negotiating team just happened to be training on Thursday for hostage scenario when the call came in for the real thing. As SWAT officers took up positions outside, negotiators talked to the suspect, who then allowed the hostages to go.

SWAT officers said in court documents they “challenged the subject at gunpoint” before he lay down on the ground and surrendered. No shots were fired and no one was injured.

Treasury Secretary Timothy Geithner, right, and Vice President Joe Biden join budget presentation.

WASHINGTON — President Barack Obama’s 2010 budget includes a clear warning that the nation’s banks may need substantially more government aid if the economy deteriorates further.

The proposal unveiled Thursday includes a $250 billion placeholder for government losses associated with additional financial-rescue efforts. Those losses would come from the possible deployment of an additional $750 billion — a sum that would double the size of the current bailout — and are based on estimates that the government would get back two-thirds of its investment.

Peter Orszag, director of the White House’s Office of Management and Budget, said the administration currently has no plans to ask Congress for the cash. The budget plan said “the administration will work with the Congress to determine the appropriate size and shape of such efforts, and as more information becomes available the administration will define an estimate of potential costs.”

The placeholder approach sets the stage for what will likely be intense negotiations between lawmakers and the White House about whether to fund new efforts to stabilize banks. Congress authorized a $700 billion rescue plan last year, but critics — including both lawmakers and the public — contend funds were distributed in an opaque manner and haven’t relieved the crippled financial sector.

In its budget, the administration said it likely would receive only 66 cents on the dollar for the hundreds of billions it has already invested in bailing out the banking system. The 33% loss rate assumed by the Obama administration is worse than a similar estimate made by the Congressional Budget Office last month. The CBO in January said the cost of doling out the first $247 billion of the Troubled Asset Relief Program would be $64 billion, a 26% loss rate.

The figure is more in line with an analysis by the congressional panel that oversees the TARP, which suggested the government had overpaid for its investments in banks by 31% last year.

“Estimates of the value of the financial assets acquired by the federal government to date suggest that the government will get back approximately two-thirds of the money spent purchasing such assets,” the budget blueprint said.

The $250 billion is an estimate of what the government expects to lose as it looks to shore up the financial sector.

For the Obama administration, which is formulating a revamp of the financial rescue initiated by former President George W. Bush, the fresh details could hurt attempts to restore public confidence in the TARP. Administration officials have also promised to boost the program’s transparency. Earlier this week, they announced new plans to conduct “stress tests” on at least 19 of the nation’s largest banks. Capital would be injected as needed into banks in a way that could leave the government holding common stock in financial firms.

Senior Treasury officials wouldn’t explain how the administration arrived at the $750 billion figure. At a briefing to discuss the budget, a senior Treasury official said, “you hope you have some wise people who make an approximate judgment on the placeholder, just like they do in other situations that are highly uncertain.”

The official said the Obama team could ultimately decide not to ask for additional funds. But given the likelihood that the administration will need more money, Mr. Obama opted to “acknowledge” the potential cost, the official said.

Meanwhile, staffers at the Securities and Exchange Commission said in a notice posted on the SEC Web site that the roughly 300 recipients of federal bailout funds will be expected to hold advisory shareholder votes on executive compensation this year. The SEC staff said it would follow the recommendation of Sen. Christopher Dodd, (D., Conn.) that the requirement be applied to any aid recipient that files its proxy statement after Feb. 17.