Big Banks Apply For TARP Repayment

Goldman Sachs, JP Morgan Chase, and Morgan Stanley have applied to repay the federal funding they received under the Troubled Asset Relief Program (TARP), according to a Tuesday report by _""Bloomberg News"":http://www.bloomberg.com/apps/newsxpid=20601208&sid=a5XKm1xjWNfI&refer=finance_. Together these three institutions would pay off $45 billion in taxpayer bailouts, the largest recompense to the Treasury's financial rescue pocketbook since the disbursements began under the Bush administration last October.
The banks' appeals for repayment must first be approved by the Federal Reserve, but Treasury Secretary Timothy Geithner commented last month that he would welcome the return of banks' bailout money as long as the institutions had enough capital to continue lending and could supply the credit needed to help promote an economic recovery.
Both Sachs and Chase were deemed to need no new capital under regulators' balance sheet stress tests, making them choice candidates to be released back into the private sector pool. Morgan Stanley was told it needed to raise $1.8 billion in order to satisfy the government's common equity criteria for worsening economic conditions. Since regulators' mandate was handed down earlier this month, Morgan Stanley has pulled together $4.57 billion in additional capital through the sale of stock, far exceeding its $1.8 billion deficit.
Large and small banks alike have said they want to quickly return taxpayer dollars to avoid new restrictions on compensation and hiring that were approved by Congress in February. _Bloomberg _reported that JP Morgan Chase CEO Jamie Dimon told shareholders at the company’s annual meeting in New York that participating in the TARP program ""became a little more of a painful experience"" and ""morphed into something different"" since the funds were first received.
According to _Bloomberg_, 14 of the smaller banks that received TARP funding have already repaid the money. The Treasury and Federal Reserve are expected to name the first major institutions eligible for repayment within the next few weeks. The _""Financial Times"":http://www.ft.com/cms/s/0/d8557f30-43ef-11de-a9be-00144feabdc0.html_ reported that administration officials have told executives on Wall Street they will allow five or six big financial institutions to return taxpayers’ money before the rest of the industry.