Treasury Calling on Big Banks to Repay Bailout Now

WASHINGTON — Concluding that some of the nation’s biggest banks are in good enough shape to raise capital from private investors, senior Treasury officials would like more of them to repay billions of dollars in taxpayer money that bailed them out over the last year.

But many of those banks would prefer to keep the money for several more years rather than raise new money and dilute their existing stockholders.

Ten big financial institutions repaid nearly $70 billion in June. But the Treasury said at least several other major financial firms were strong enough to follow suit, and they were debating whether federal bank regulators should send a signal encouraging them to do so.

That would be a big change from the reluctance that Treasury officials displayed for much of this year, when they wanted to make sure that banks had enough capital to shore up confidence in the financial system and to handle their own losses.

Administration officials cautioned that the decisions will be up to the banks’ regulators, and several top regulators warned on Wednesday that the banking industry still faced huge losses tied to commercial real estate, home mortgages and defaults on credit cards. But Treasury officials are keenly aware that profits are soaring at many of the biggest banks. JPMorgan Chase reported on Wednesday that it earned $3.6 billion in the last quarter, and analysts expect a string of big gains from other institutions.

http://www.nytimes.com/2009/10/15/business/15tarp.html?partner=rss&emc=rss

At the least, big banks should not be giving any bonus to their top employees until AFTER the money they borrowed from the tax payers is fully paid back