American banks to repay government

American banks to repay government
AP
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First Published: Wed, Jun 17 2009. 09 56 PM IST
Updated: Wed, Jun 17 2009. 09 56 PM IST
New York: Goldman Sachs disclosed in letters to high-ranking congressmen and senators on 16 June that it is ready to repay $10 billion government investment from Wednesday.
Goldman Sachs is one of 10 large US banks that obtained approval last week to pay back a total of $68 billion received as part of the government’s $700 billion troubled asset relief program (TARP). The program was aimed at reviving the stagnant credit and lending markets.
Today is the first day banks are eligible to begin repaying the investments to the Treasury Department.
Morgan Stanley is also expected to repay today the $10 billion it received, according to a person familiar with the talks between the bank and the government.
Eight other banks received approval last week to repay the government funds: JPMorgan Chase & Co, American Express Co, US Bancorp, Capital One Financial Corp, Bank of New York Mellon Corp, State Street Corp, BB&T Corp and Northern Trust Corp.
Before receiving approval to repay the TARP funds, the banks had to prove they could raise capital in the public markets without the support of the government.
Repaying TARP funds frees the financial firms of limitations the government imposed on recipients, such as caps on executive compensation.
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First Published: Wed, Jun 17 2009. 09 56 PM IST
More Topics: USA | Repayment | Goldman Sachs | Morgan Stanley | TARP |