US Treasury Rescue Funds
Help Spur Bank Mergers
Congress initially wanted some of the $700 billion financial
market rescue package to spur lending, but the U.S.
Treasury’s financing of the PNC Financial Services Group
(PNC) and National City Corp. (NCC) merger suggests the
bailout money may have opened the door for more bank
buyouts.
Prior to PNC’s announcement that it would acquire the
troubled National City Bank for about $5.2 billion, federal
regulators advised PNC it would be allowed to combine its
assets with National City’s for a capital injection and effectively
increase the amount of money it could receive,
according to a PNC filing with regulators and an interview.
A merger was National City’s only hope for survival because
its dismal financial situation prevented it from tapping
Treasury funds, according to a company regulatory filing.
And so it chose to be acquired by PNC, which is now eligible
to receive about $7.7 billion from the Treasury — $4.2
billion of which will be issued once the merger is complete.
Treasury’s actions in the PNC case have continued the
debate in the banking community about the acceptable
use of the rescue money. Since Congress passed the
Troubled Asset Relief Program, or TARP, at least five financial
institutions that have been approved for capital injections
from Treasury have announced or completed company
takeovers.
FDA: Salix Drugs To Carry Warnings
Salix Pharmaceutical Ltd.’s (SLXP) two bowel-cleansing
drugs, Visicol and OsmoPrep, will carry strong warnings
about a type of acute kidney injury associated with the
products, federal regulators said Thursday.
The two drugs are oral sodium phosphate products commonly
used to cleanse the bowel before a colon examination.
In the case of OsmoPrep, the Food and Drug
Administration said in a press release it has received
reports of 20 unique cases of kidney injury.
It is unclear how many cases were reported with Visicol,
though the agency characterized the incidences of acute
AI
