The US Treasury has given the green
light to 10 banks to start repaying the capital they received from
the Troubled Asset Relief Program (TARP), a month after JPMorgan
Chase, Goldman Sachs, Morgan Stanley and American Express filed
applications with regulators for permission to repay the funds.
All four applications were approved, together
with subsequent requests from US Bank, Capital One, Morgan Stanley,
BB&T, State Street and Northern Trust.
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In all, TARP payments of $68 billion will be
repaid. According to US investment firm Hill-Townsend, the US
Federal government’s annualised return on investment from TARP will
approach a very healthy weighted average of 17.8 percent for the 10
banks.
But as a number of analysts have been quick to
point out, such a positive gain has come from relatively healthy
banks. Other institutions remain in trouble: insurance giant AIG,
for instance, alone received $70 billion of TARP funds.
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