Treasury Secretary Geithner Expects More TARP Repayments Coming

As far as the federal government is concerned, propping up the country’s big banks deemed “too big to fail” during the height of the financial crisis was a step in the right direction, one that has averted a more severe economic disaster, and a gamble that is now literally paying off. In fact, judging from what U.S. Treasury Secretary Timothy Geithner recently said, American taxpayers can rest easier now.

In a speech before the annual meeting of Securities Industry and Financial Markets Association in New York last Tuesday, Geithner revealed that several of the more stable banks were already able to pay their borrowings availed under the Troubled Asset Relief Program (TARP) including JP Morgan Chase and Goldman Sachs.

He also expressed confidence that with the economy showing more activity, more banks could follow suit. “I expect you’ll see capital come back fairly quickly,” Mr. Geithner said.

While scant details were offered as to exactly when these repayments will come, and how much has been paid by or will be coming from what companies, it is reported that about $71 billion in taxpayer money has already been returned to the government’s coffers.

On the other hand, Geithner was also quick to acknowledge that there are still a number of companies including those in the auto industry and financial companies where repayment would be slow in coming. “In the event of slow recovery in auto sales it is going to take some time for the government to be repaid,” he said.

Among the financial organizations that may fall under this category are hundreds of smaller community and regional banks, as well as two of the biggest recipients which have been continually under fire since being associated with financial instability – Bank of America and Citibank. About $134 billion still remains spread out among all these institutions.

The Troubled Assets Relief Program expires come December 31, 2009 unless Geithner finds reason to extend it until October of the following year. Due in part to bank repayments that have been made, the program still has about $317 billion in uncommitted funds as of the end of September.

About the banks

 

Chase

JPMorgan Chase & Co. (NYSE: JPM) is a leading global financial services firm with assets of $2.2 trillion and operations in more than 60 countries. The firm is a leader in investment banking, financial services for consumers, small business and commercial banking, financial transaction processing, asset management, and private equity.

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Goldman Sachs

The Goldman Sachs Group, Inc. is a leading global financial services firm providing investment banking, securities and investment management services to a substantial and diversified client base that includes corporations, financial institutions, governments and high-net-worth individuals. Founded in 1869, the firm is headquartered in New York and maintains offices in London, Frankfurt, Tokyo, Hong Kong and other major financial centers around the world.

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Bank of America

Bank of America is one of the world's largest financial institutions, serving individual consumers, small and middle market businesses and large corporations with a full range of banking, investing, asset management and other. It operates in 32 states, the District of Columbia and 30 foreign countries.

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Citibank

Citi is today’s pre-eminent financial services company, with some 200 million customer accounts in more than 100 countries. Citibank checking, savings, and money market accounts come with a Citibank® Banking Card, which is your key to accessing your accounts online, at ATMs, by phone, or at branches.

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