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June 10, 2009

Ten US banks authorised to repay government debt

by Gill Montia

Story link: Ten US banks authorised to repay government debt

Ten of the largest banks in the US can now begin to regain their independence by paying back bail-out money to the US Treasury.

Official permission has been granted and the US taxpayer could get back $68 billion if repayments are made to the maximum.

According to a US Treasury statement: “These repayments follow a period in which many banks have successfully raised equity capital from private investors. Also, for the first time in many months, these banks have issued long-term debt that is not guaranteed by the government.”

Treasury Secretary, Tim Geithner, comments: “These repayments are an encouraging sign of financial repair, but we still have work to do.”

More than 600 banks across the US have participated in the country’s Capital Purchase Program, representing $199 billion in investments.

Banks to have received repayment permission have paid around $1.8 billion in dividends on the preferred shares held by the US Government in the past seven months.

According to a report in The Times, JP Morgan Chase, Capital One and Morgan Stanley are among those to have confirmed that they will taking up the repayment offer.

 

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