Happy one-year birthday Stimulus! It's been a year since Obama signed the $787 billion American Recovery and Reinvestment Act, and what better way to celebrate than to learn that banks will need an additional $221 billion of capital if all proposed financial regulations are implemented?
"The cumulative impact of all the proposed regulation suggests that there is a real risk that we may move from a system that was under regulated to one that is over regulated and that that could cause a significant increase in lending costs and a negative impact on the economy," Nick O'Donohue, head of research at JPMorgan, said in a research note.
In an annual report on the stimulus' progress, Joe Biden says that the act created or saved 2 million jobs and added between 1.5% and 3% in GDP growth in the fourth quarter. The program is on track with its goal to disburse 70% of the funds, or $551 billion, by Sept.30, 2010. However, to achieve that goal, Biden said in the report that monthly disbursements will have to increase to $32 billion, from $27 billion.