10 big banks get OK to repay $68B in bailout money
Posted on 09. Jun, 2009 by admin in Buzz
10 big banks get OK to repay $68B in bailout money! According to Treasury Secretary Tim Geithner, the Treasury Department today gave approval to 10 of US’ largest banks will be given the opportunity to repay the money that they’d gotten from the government as bailout.
The Congress had created the TARP (Troubled Asset Relief Program) $700 billion fund last October at the height of the economic crisis.
It is these banks that are earnestly waiting to come out of the government program so they are off restrictions including the capping on compensation.
However, last month government conducted some stress tests on many banks and those banks that confirmed of receiving permission from government to repay the bailout money include JPMorgan Chase & Co, U.S. Bancorp, American Express Co., Capital One Financial Corp., BB&T Corp and Bank of New York Mellon Corp.
It was the Morgan Stanley that failed the government test, however, it had raised capital quickly so received approval to repay its TARP money.
Financial experts heaved a sigh a relief saying that approving 10 banks to repay $68 billion in bailout money indicates returning of stability into the system; however, cautioned though that the crisis is still breathing. There are a section of experts who opine that the repayments could actually increase the gap between the strong and the weaker banks.
It should be noted that across US about 600 banks received close to $200 billion in the TARP money and about 22 smaller banks have repaid the money already.
Doesn’t these repayments are a sign of easing of the crisis? Well, yes indeed they are an encouraging sign of the financial repair although lot is needed still, according to the Treasury Secretary Tim Geithner.
