Three Big Banks Apply to Repay TARP Funds

Goldman, JPMorgan, Morgan Stanley want out of pay restrictions
By Jason Farago,  Newser Staff
Posted May 19, 2009 7:59 AM CDT
Three Big Banks Apply to Repay TARP Funds
Goldman Sachs CEO Lloyd C. Blankfein, left, and JPMorgan Chase CEO James Dimon testify on Capitol Hill in Washington, before the House Financial Services Committee.    (AP Photo/Manuel Balce Ceneta, file)

Goldman Sachs, JPMorgan Chase, and Morgan Stanley have applied to repay a combined $45 billion of TARP funds, Bloomberg reports. The three banking giants must receive permission from the Fed before returning the money. The repayments would be the most substantial since Congress established the $700 billion program, and will allow the banks to escape restrictions on compensation and hiring.

Last month Tim Geithner said he would be happy for banks to repay TARP funds so long as regulators determined they had enough capital to keep lending. While Goldman and JPMorgan have been eager to repay the Treasury for months, Morgan Stanley has been more reluctant. Lawyers say that the banks should be cautious: they may face lawsuits if they repay the money too soon and then go back to the government for another handout.
(More TARP stories.)

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