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Banks pay back $68bn in major US shake-up
9 Jun 2009The American banking industry underwent a radical shake-up tonight after the government allowed
10 banks to repay $68 billion (£42 billion) of bailout funds.
“These repayments are an encouraging sign of financial repair but we still have work to do,” said US Treasury Secretary Timothy Geithner.
Among the banks that repaid the funds received under the Troubled Asset Relief Programme, or Tarp, were Morgan Stanley, American Express, Capital One and Bank of New York Mellon. JPMorgan and Goldman Sachs were also thought to have paid back bailout cash.
It freed them from government control and signalled they are not considered in need of further public aid — making them look far stronger than rivals such as Bank of America and Citigroup, which remain on life support.
“Until now, banks had been at an equal disadvantage,” said Jack Ablin at Harris Private Bank. “Now, you'll have some that are unfettered and others that are constrained. That will affect the ability to attract customers and talent.”
