Washington - Ten of the largest US banks which received
emergency government bail-out funds at the height of the financial
crisis last year have been authorized to repay the money, the US
Treasury Department announced Tuesday.
The Treasury Department, which did not name the individual banks,
could receive as much as 68 billion dollars if the financial
institutions begin buying back government holdings in the firms.
Congress in October authorized 700 billion dollars in government
funds to help faltering finance institutions and carmakers under the
Troubled Asset Relief Programme, or TARP. The Treasury Department
established criteria, or 'stress tests,' to ensure the companies were
healthy enough before they could begin returning the money.
'These repayments are an encouraging sign of financial repair,
but we still have work to do,' Treasury Secretary Tim Geithner said.
The Bush administration rushed in with the emergency funding to
contain the economic fallout resulting from the finance market
meltdown that sent the United States into its worst recession in
decades and sparked a worldwide economic downturn.
Nearly 600 banks nationwide have received 199 billion dollars in
TARP money, and many smaller ones have already repaid it. Several of
the largest banks like JP Morgan Chase and Morgan Stanley have said
they have raised billions of dollars in new investments and were
ready to begin repaying TARP loans.
The Treasury Department said it will allow the banks to buy back
government holdings 'at fair market value.' Treasury said it has
also received 1.8 billion dollars on stock dividends from the 10
banks and so far has earned 4.5 billion dollars in dividend
payments from all the banks participating in TARP.
Treasury said the money will allow it to reduce national
borrowing and debt or increase the 'cushion to respond to any future
financial instability that might otherwise jeopardize economic
recovery.'
JP Morgan Chase was among the banks who confirmed Tuesday it has
been granted approval to repay 25 billion dollars in TARP funds.
BB&T Corporation, the tenth largest US bank, said Tuesday it would
repay 3.1 billion dollars in TARP loans following Treasury's
approval.
USA
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