Snappy newsletters. Simple Facebook sharing. Spirited comments. Sweet features are waiting… GET THEM NOW!

Fed Prods Banks for TARP Repayment Plans

BofA, Citi, 7 others asked to submit outlines

By Harry Kimball, Newser Staff

Posted Nov 24, 2009 11:47 AM CST

(Newser) – The government is stepping up plans to wind down the TARP program. The Fed has asked nine banks stress-tested earlier this year, including Bank of America and Citigroup, to come up with plans to repay a total of $142 billion in TARP funds. The move represents an evolution in the central bank’s attitude toward the bailout funds it was loathe to take back just months ago.

Some think the move would be a plus, at least symbolically. “It would send a terrific message to the market if there was a plan and a timetable,” an insider tells Bloomberg. “It would signify they are good enough to stand on their own.” The stress test results released in May concluded that the banks needed to raise more private capital before they could repay the money and rid themselves of government strings.

A Bank of America sign is shown at a branch at the Bank of America Center in San Francisco. (AP Photo)

Citigroup headquarters is seen in New York. (AP Photo)

« Prev« Prev | Next »Next » Slideshow

CLICK BELOW TO VOTE

To report an error on this story, notify our editors.

OTHER STORIES ON OUR RADAR

Getty Images

White Grandfather Cuffed for Walking With Black Granddaughter (NewsOne)

Man in Mugshot Explains Why He Has Half a Head (HuffPost)

These Exes Were Spotted Making Out … and That's a Bad Thing (Bleacher Report)

Help! I'm Having an Incestuous Relationship With My Twin (Slate)

Proof that Twitter Users are Sexier Than Facebook Users? (GeekSugar)

Partner Links

A snapshot of the day's best news stories.

View Larger Grid

All Today Yesterday Pick a Date

COMMENTS

Read the comment policy

Showing 3 of 6 comments

Snowleopard

Nov 25, 2009 9:00 AM CST

all money is printed money. the credit bubble popping is like money just disappears, (leveraging on credit works as a money multiplier), so policies like TARP or lowering the Fed funds rate is used so the economy doesn't freeze up.

DontLikeYou___

Nov 25, 2009 1:24 AM CST

smoke and mirrors.

serfinWI

Nov 24, 2009 6:54 AM CST

It will disappear down a big govt' black hole. Not like the gov't really had it to loan out in the first place.

What's Popular Now on Facebook

Guy Buys $123 Safe on eBay, Finds Major Cash Inside

Study Finds Arsenic in Baby Formula, Cereal Bars

Bloomberg (Source Grid »)

Money

Bank of America • Federal Reserve • Wells Fargo • Citibank • Troubled Asset Relief Program • Wall Street bailout • TARP • repayment • stress test • PNC • TARP repayment

More Newser Stories

Citi, Wells Fargo Clash With Feds Over Repaying TARP

Fed, Treasury want banks to raise more capital first

(NEWSER) - Citigroup and Wells Fargo are at odds with the government over how much they need to raise to repay their TARP bailouts, with Uncle Sam wanting them to raise more capital first. Both are looking to follow Bank of America’s lead and get out from under the TARP, allowing them to escape federal scrutiny of executive compensation, but they’ve been told to raise more relative to what they’re repaying than BofA did, the Wall Street Journal reports. More»

To Spur Bank Execs to Act, Mess With Their Pay

Compensation limits have prompted swift TARP repayment

(NEWSER) - A common complaint about the TARP bailouts was that by injecting capital and making the financial environment more friendly, the government wasn't doing enough to push the banks into real reform. Why wouldn't the banks simply live off TARP cash as long as they could? Yet those concerns were unfounded, writes Daniel Gross, because it turned out the government did have an effective motivator: limits on compensation. More»

Wells Fargo Will Pay Back $25B, Exit TARP

Bank plans $10.4B stock sale; move will boost EPS

(NEWSER) - Wells Fargo will repay $25 billion in federal bailout funds, becoming the last major national bank to square its TARP account. Part of the money will come from a stock sale that's expected to yield $10.4 billion, the New York Times reports. "We’re ready to fully repay TARP in a way that serves the interests of the U.S. taxpayer, as well as our customers, team members and investors," said CEO John Stumpf. The move also frees the bank from government oversight and the accompanying restrictions on compensation. More»

Taxpayers Will Score $12B on Citigroup Bailout: Treasury

Government strikes deal to sell remaining 2.4B shares

(NEWSER) - Taxpayers will wind up making out like bandits on their $45 billion bailout of Citigroup. The Treasury Department has struck a deal to sell its remaining 2.4 billion shares of Citigroup for $4.35 a share, it announced yesterday, bringing the total money made off such sales to $57 billion. Citigroup will pay the underwriting fees on the sale. More»

Bank of America Will Repay $45B TARP Loan

Move will help bank rid itself of government restrictions

(NEWSER) - Bank of America is joining the ranks of banks that have repaid their TARP loans. The bank will repay $45 billion to the Treasury Department to begin ridding itself of restrictions on pay and other matters. BofA plans to raise $20 billion in capital to beef up its reserves and prevent it from returning with outstretched hands. Another nugget from the Wall Street Journal : The man who negotiated the deal, chief risk officer Greg Curl, may soon become the bank's interim CEO. More»

NEWS FROM OUR PARTNERS

What is Newser?

Face it: there's too much news. At Newser, we choose the most thought-provoking and entertaining stories from hundreds of US and international sources and reduce them to a headline, picture, and two paragraphs. And we do it 24/7—you can come back morning, noon, night (and in between) for something new that matters. Read less, know more.

Learn more »

Partnering with: Slate

View Newser on the mobile website

Fed Prods Banks for TARP Repayment Plans

BofA, Citi, 7 others asked to submit outlines

OTHER STORIES ON OUR RADAR

Bank of America • Federal Reserve • Wells Fargo • Citibank • Troubled Asset Relief Program • Wall Street bailout • TARP • repayment • stress test • PNC • TARP repayment

MOST POPULAR STORIES

[ By Views ]

[ By Comments ]

More Newser Stories

Citi, Wells Fargo Clash With Feds Over Repaying TARP

Fed, Treasury want banks to raise more capital first

To Spur Bank Execs to Act, Mess With Their Pay

Compensation limits have prompted swift TARP repayment

Wells Fargo Will Pay Back $25B, Exit TARP

Bank plans $10.4B stock sale; move will boost EPS

Taxpayers Will Score $12B on Citigroup Bailout: Treasury

Government strikes deal to sell remaining 2.4B shares

Bank of America Will Repay $45B TARP Loan

Move will help bank rid itself of government restrictions

About Us

Site

Newser By Users

Community

Site Maps

Tools

More News

What is Newser?

Fed Prods Banks for TARP Repayment Plans

BofA, Citi, 7 others asked to submit outlines

Bookmark & Share

OTHER STORIES ON OUR RADAR

Bank of America • Federal Reserve • Wells Fargo • Citibank • Troubled Asset Relief Program • Wall Street bailout • TARP • repayment • stress test • PNC • TARP repayment

MOST POPULAR STORIES

[ By Views ]

[ By Comments ]

More Newser Stories

Citi, Wells Fargo Clash With Feds Over Repaying TARP

Fed, Treasury want banks to raise more capital first

To Spur Bank Execs to Act, Mess With Their Pay

Compensation limits have prompted swift TARP repayment

Wells Fargo Will Pay Back $25B, Exit TARP

Bank plans $10.4B stock sale; move will boost EPS

Taxpayers Will Score $12B on Citigroup Bailout: Treasury

Government strikes deal to sell remaining 2.4B shares

Bank of America Will Repay $45B TARP Loan

Move will help bank rid itself of government restrictions

About Us

Site

Newser By Users

Community

Site Maps

Tools

More News

What is Newser?