10 Banks To Repay $68B Of TARP Funds
That’s out of the nearly $230B given out over the past 9 months.
In other words, nearly 30% of the money that we would NEVER see again is being paid back. And the government could actually make a profit if they choose to exercise stock options, but there’s word they won’t do that.
The decision is a milestone for the Obama administration’s financial rescue plan, reflecting new confidence that some large banks have returned to stable profitability. It is also a victory for the banks, which have pressed for permission to show strength and to avoid restrictions including limits on executive pay. But senior officials cautioned that the repayments are not a sign of a broader economic revival.
“These repayments are an encouraging sign of financial repair, but we still have work to do,” Treasury Secretary Timothy F. Geithner said in a statement.
The list of banks was longer than many financial analysts had expected, in part because banks have been able to attract billions of dollars in new capital from private investors following the conclusion of government stress tests.
And those are just the big banks. Much smaller banks have already repaid their TARP funds…
The government already has allowed 22 community banks to repay about $1.8 billion in federal aid, but this marks the first time large banks have been given permission to return money. Treasury officials say they now are comfortable that these banks can weather the recession without the benefit of direct government support. The government continues to support banks through a variety of other, less visible programs, including debt guarantees, cheap loans and a pledge that the largest banks will not be allowed to fail.
No doubt there’s still a hell of a lot of taxpayer money out there, but you can’t say the Obama administration doesn’t have a plan to get this money back. And now we’re seeing that plan work, so some very encouraging signs of progress.
By the way, if you want to see the banks that went through the stress tests and the amount of TARP funds they were given, go here.