Ten major US banks received approval to repay Troubled Asset Relief Program (TARP) funds early, potentially leading to a repayment of $68 billion in taxpayer bailout money. The Treasury Department did not disclose which 10 banks were given approval for early TARP repayment. However, several banks have already publicly stated their intention to pay back the TARP funds if given approval.
Banks paying back TARP early
Some of the banks who are thought to be paying back their TARP funds early include Capital One, BB&T, and U.S. Bancorp, and most of the banks that it was determined would not need new capital after the bank stress test results were released last month. Those banks include Goldman Sachs, JPMorgan Chase, American Express, Bank of New York Mellon, JPMorgan Chase & Co., and State Street.
So far, the only banks the US Treasury department has allowed to pay back TARP funds have been small banks, totaling almost $1.9 billion.
Paying back the TARP funds is like kicking a bad habit
The banks can’t wait to get rid of the TARP funds because of increasing restrictions and limitations imposed by the government. To get rid of the TARP, banks were required to raise billions of dollars in funds to ensure they had enough reserves to weather substantial losses.
Overall, this should increase the banks’ flexibility in dealing with the economic crisis.