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 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 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.
JP Morgan Chase was among the banks which confirmed Tuesday it had
been granted approval to repay 25 billion dollars in TARP funds.
Morgan Stanley said it would repay 10 billion dollars. US Bancorp
said it was repaying 6.6 billion dollars.
American Express, Bank of New York, Mellon, BB&T Corporation,
Capital One Financial, Northern Trust and State Street Corporation
confirmed combined repayments of 16.5 billion dollars. Goldman Sachs
is reportedly the other bank approved to repay a 10-billion-dollar
loan.
The Bush administration rushed in with the emergency funding last
year 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 in 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.'
USA
Your Talkback on this Story