Ten Unnamed Big Banks Get OK To Repay $68B In Bailout Money

Ten Unnamed Big Banks Get OK To Repay $68B In Bailout Money - 6/9/2009

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HEADLINES \| SETTLEMENTS AND DISMISSALS \| COURT FILINGS LINKS TO OTHER NEWS \| NEWS ARCHIVE	HEADLINES ARCHIVED SETTLEMENTS AND DISMISSALS ARCHIVED

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Ten Unnamed Big Banks Get OK To Repay $68B In Bailout Money, They Will Be Allowed To Repay The Money They Received From The $700B Troubled Asset Relief Program

Associated Press. June 9, 2009
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EXCERPT: The Treasury Department has approved 10 of the nation's largest banks to repay $68 billion in government bailout money. The department today said the banks, which were not named, will be allowed to repay the money they received from the $700 billion Troubled Asset Relief Program created by Congress last October at the height of the financial crisis. The banks have been eager to get out of the program to escape government restrictions such as caps on executive compensation. Among the banks that passed government "stress tests" last month and likely were approved to repay the bailout funds are Goldman Sachs Group Inc., JPMorgan Chase & Co., and American Express Co. Experts say allowing 10 banks to return $68 billion in bailout money illustrates some stability has returned to the system but caution that the crisis isn't over. Some worry the repayments could widen the gap between healthy and weak banks. More than 600 banks nationwide have received nearly $200 billion in TARP money, and 22 smaller banks already have repaid it. "These repayments are an encouraging sign of financial repair, but we still have work to do," Treasury Secretary Tim Geithner said in a statement. The firms now have the right to purchase the warrants Treasury holds in their firm "at fair market value." Besides Treasury's potential income from the sale of the warrants, the 10 banks already have paid dividends on the preferred stock totaling about $1.8 billion over the last seven months. Dividend payments received for all participants are about $4.5 billion to date, according to Treasury. Northern Trust Corp. was not among the 19 banks subjected to stress tests, but that company also was in line to receive repayment permission, according to two industry sources with knowledge of the matter. They requested anonymity because they were not authorized to discuss it.

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