Ten US banks to repay $68bn into Tarp
Ten US banks have been given approval to repay a combined $68 billion (£41 billion) in Government bailout money, said the US Treasury.
In a sign that stability is returning to the banking sector, the banking giants will repay some of the money it was loaned in the US Government’s $700 billion Troubled Asset Relief Programme (Tarp) introduced last autumn.
The Treasury had been reluctant to let banks repay but now appears to believe financial stability is not at risk.
Some of the US banks have been keen to repay the funds back into the Tarp in order to be free from potentially onerous Government restrictions, such as limitations on executive pay – shortly to be introduced by the Obama administration.
According to Tim Geithner, US Treasury Secretary, the money being paid back into the Tarp could potentially be used to help smaller struggling financial institutions.
Mr Geithner described the repayments as “an encouraging sign of financial repair“ but admitted there was still more work to do.
Over 600 US banks have so far had funds injected from the Tarp.
While the Treasury has not disclosed the names of the banks granted permission to repay, JP Morgan, American Express, Bank of New York Mellon, BB&T Corp, Capital One Financial, Morgan Stanley, State Street and US Bancorp have all confirmed that they had been granted approval to repay the money.