JP Morgan, Amex, raise cash to disentangle from government

New York - JPMorgan Chase & Co and American Express Co announced plans to sell stock to satisfy a new central bank rule announced Monday affecting firms who took government bail-out money. The new Federal Reserve rule forces the firms to raise money from equity markets before they will be allowed to repay the rescue funds to the government, Bloomberg financial news service reported. JPMorgan, the second-largest US bank by deposits, is to sell 5 billion dollars of stock. Amex, the country's largest credit-card company by purchases, is to raise up to 575 million dollars. The plans were released in separate statements. The two companies were among nine firms that got good marks after the so-called stress test results for the country's 19 largest financial firms were released last month. They were not among the companies deemed to need additional new capital to survive continuing economic distress over the next two years - the standard set by the US Treasury and Federal Reserve. But the Federal Reserve added another requirement on Monday, insisting that even firms performing better had to raise added money before paying back bail-out money. 'Theyre the government; they can change the rules,' said Paul Miller, an analyst at FBR Capital Markets in Arlington, Virginia. And thats the beauty of being the government.' JPMorgan wants to repay the 25 billion dollars by the end of June. JPMorgan, Goldman Sachs and Morgan Stanley have applied to refund a combined 45 billion dollars of bail-out money, which would mark the biggest reimbursement to taxpayers since the 700-billion-bank bailout program began in October. Amex wants to start repurchasing the 3.4 billion dollars of preferred shares now owned by the US government. The government is to issue a list of its first group of redemption approvals in the week starting June 8. When they released the results of its stress test last month, US officials said industry giant Bank of America needed the most injection of capital, a sum of 34 billion dollars, followed by WellsFargo bank, with 13.7 billion dollars.