Bankruptcy

TARP Money Repaid

By mcbride

Some big banks are trying to extricate themselves from government interference with their corporate governance?read salary caps?by repaying TARP money.  It is interesting that the Treasury Department had to approve the repayments (this being unlike normal loans, which is an understatement) and one wonders about the effect that this repayment has on the very public and very negotiated stress testing which the federal government did on the banks.  ?JPMorgan repaid $25 billion, Morgan Stanley gave back $10 billion, Minneapolis-based U.S. Bancorp refunded $6.6 billion and Winston-Salem, North Carolina-based BB&T Corp. paid $3.1 billion?. The banks are among 10 companies that last week said they would repay a total of $68 billion to the Troubled Asset Relief Program after Treasury approved the payments?. Banks are repaying TARP almost eight months after then- Treasury Secretary Henry Paulson, seeking to quell market panic that followed the Sept. 15 bankruptcy of Lehman Brothers Holdings Inc., provided nine banks with $125 billion from the $700 billion TARP fund passed by Congress. The government?s stress test of the 19 largest banks last month determined that U.S. Bancorp and BB&T didn?t need any additional capital.

Bank of America Corp., the biggest U.S. bank by assets, and Citigroup Inc. weren?t among banks Treasury cleared to repay TARP. They each accepted $45 billion in U.S. aid. Wells Fargo & Co., the nation?s largest mortgage lender and the recipient of $25 billion in government aid, also wasn?t on the list.?

Here is the link: http://www.bloomberg.com/apps/news?pid=20601087&sid=aMaJeKZi89RM

Michael

Full post as published by Texas Lawyer Blog on June 17, 2009 (boomark / email).