Obama to announce $120 billion fee on big bank transactions

President Barack Obama is set to announce this morning a ‘financial crisis responsibility fee’ that may generate $90 to $120 billion dollars for tax payers over the next 10 years, the White House said late Wednesday, according to media reports.

The government is expected to charge a fee of 15 basis points on certain ‘risky’ derivatives transactions.

The new fees come amid of renewed public outrage on big banks. CEOs from top Wall Street firms were grilled yesterday at the first hearing of recently created congressional panel called the Financial Crisis Inquiry Commission. A major issue was the upcoming record-breaking earnings and bonuses of big banks. Goldman Sachs is set to report earnings on January 21st. It is expected to have a $21 billion bonus pool, according to Fortune. The bank is expected to post earnings of $5.38 per share, according to analysts polled by Bloomberg.

Lloyd Blankfein emphasized in yesterday’s testimony that Goldman Sachs has repaid TARP funds with interest and that the firm will rely more on equity compensation, especially for top executives.

The public is still not satisfied with the response, however, in the midst of a struggling economy and double digit unemployment. New York Attorney General Andrew M. Cuomo points out the fact that banks are institutions that would have failed were it not for the taxpayer money,” he said according to Washington Post.

Goldman CEO Blankfein referred to the financial crisis as a 100-year storm in his testimony yesterday. He cautioned policy makers against harsh measures that would impede economic growth.