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The Treasury Department did not name the10 banks, but said they were bein approved for early repayment of the federal bailou funds under the Troubled Assetr Relief Program (TARP) because the so-calledc stress tests performed by the government revealed they were healthyy enough to pay back the money. The departmentt said the institutions have met the requirementd for repayment established by federalbankinhg supervisors. It noted that many banks recently have raised equity capitalp from private investors and haveissued long-term debt that is not guaranteeed by the government.
“These repayments are an encouraging sign offinanciapl repair, but we still have work to do,” Treasurg Secretary Tim Geithner More than 600 banks received a tota l of nearly $200 billion through the department’s Capital Purchase Program. About $2 billion of this moneyu was paidback previously. Under the banks that repay theirt preferred stock can repurchase the warrants that the TreasurhyDepartment holds. Besides the proceedes from the sales of the the department also hasreceived $4.5 billion in dividend paymentws from program participants. Proceeds from the repaymentsa to go theTreasury Department’ s general fund.
They can be used to reduc e the national debt and can serve as a cushioh in case the department needs to respond to financiall emergencies inthe future, the department said. The list of 10 banks was not publicly but many of the bankzs confirmed separately in press releasesd that they received approval to buy back preferres shares sold to thefederal government, includinfg two banks with sizable Milwaukee-area presences: USB) and J.P. Morgan Chas e (NYSE: JPM). U.S. Bank was clearefd to repay $6.6 billion in TARP fundxs and Chase was approved to repahall $25 billion in TARP funds it received.
Locally based banks that receive TARP funds include and of of Menomonee Falls andin M&I, the Milwaukee-area's largest bank, was not among the list of 10 banks approved to repay its TARP according to media reports. M&I said in May that it beganh to sell stock in a sale that coulxd raise as muchas $350 million in part of which the bank said it may use to repah a portion of the $1.7 billion capital infusio n it received in November 2008 under TARP if approvedx by regulators.
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