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President Barack Obama will announce plans on Thursday to raise up to $120 billion from major U.S. financial firms to cover expected losses from a taxpayer-funded bank bailout, a senior administration official said on Tuesday.
Obama's announcement will come as U.S. unemployment is stuck in double digits and public anger is growing over big bonuses that some financial firms are poised to resume paying, barely a year after the height of the global financial crisis that made the bailout necessary.
The Obama administration official said the amount of money raised from the fees would not exceed $120 billion since this was the higher end of conservative estimates of the cost of the Troubled Asset Relief Program, or TARP.
U.S. Treasury officials expect TARP losses to be much lower than that sum, and over the course of years the fee will pay back any costs of the $700 billion taxpayer bailout, the administration official said.
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TARP was created by President George W. Bush's administration to shore up the financial system during the financial meltdown, which plunged the United States into the worst recession in 70 years and has pushed unemployment to 10 percent.
The proposal of a TARP fee has been under discussion since August and Obama felt it was important to find ways to make sure taxpayers got all the money back sooner than was required under the law, the administration official said.
A number of big U.S. banks have already repaid the capital they received under TARP. The legislation that created TARP calls for taxpayer losses to be recouped by 2013.
A financial industry source in Washington told Reuters that many options on how to structure such a fee were being discussed, including basing it on the amount of a financial firm's liabilities.
The source, speaking anonymously because the fee has not officially been proposed, said government officials are also discussing exempting automakers and insurer American International Group [AIG 28.46 
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BANGKOK – Asian stock markets were mixed Tuesday as investors held back ahead of a stream of earnings while Japan Airlines tumbled 45 percent amid fears of bankruptcy. European shares fell moderately.
The lackluster performance in Asia was despite modest gains on Wall Street where stocks rose on signs that global manufacturing is on the mend.
A raft of quarterly earnings reports are due from the U.S., European and Asian companies in the coming weeks and will give investors further insight into the strength of the global recovery.
The dollar was lower against the yen but gained against the euro. Oil fell below $82 a barrel on expectations a frigid cold spell in parts of the U.S., Europe and Asia will ease in coming weeks, weakening crude demand.
As trading started in Europe, benchmarks in France, Britain and Germany were down 0.5 percent or less. Futures augured modest losses Tuesday on Wall Street with S&P futures off 3.5 points, or 0.3 percent, at 1,139.
Earlier in Asia, Japan's Nikkei 225 stock average rose 80.82 points, or 0.8 percent, to a fresh 15-month high of 10,879.14 with investors playing catchup to Asia's gains on Monday when Japanese markets were closed for a public holiday.
Japanese machinery stocks and automakers like Toyota Motor Corp. got a boost from the weekend's news that China's exports and imports surged in December after months of declines.
Japan Airlines, Asia's largest carrier, dived 45 percent to a new record low after media reports said bankruptcy and removal from the stock exchange are all but inevitable for the money-losing carrier. In the morning session, trading in JAL shares was paralyzed due to a glut of sell orders.
Hong Kong Hang's Seng, meanwhile, dropped 84.88, or 0.4 percent, to 22,326.64 and Australia's benchmark slid 1 percent as mining giants like BHP Billiton fell amid the lower oil price.
South Korea's Kospi advanced 0.3 percent to 1,698.64. China's Shanghai index jumped 61.22, or 1.9 percent, to 3,273.97 — still surfing a wave of enthusiasm for the government's approval of stock futures and margin trading.
Elsewhere, Singapore's market lost 0.5 percent, Taiwan retreated 0.2 percent and India's Sensex was down 0.5 percent.
In the U.S. on Monday, the Dow rose 45.80, or 0.4 percent, to 10,663.99. The S&P 500 index rose 2.00, or 0.2 percent, to 1,146.98, while the Nasdaq fell 4.76, or 0.2 percent, to 2,312.41.
In oil, benchmark crude for February delivery was down 54 cents to $81.98 a barrel in electronic trading on the New York Mercantile Exchange. On Monday, a weakening U.S. dollar helped push the contract to a 15-month high near $84 a barrel before it settled down 23 cents at $82.52.
Among currencies, the dollar fell to 91.91 yen from 92.13 yen. The euro fell to $1.4481 from $1.4514.
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