Wednesday, June 10, 2009
Banks repay $68bn debt loans
Interest rates may return to more normal levels after the bombed out banking sector promised to repay some of their loans from taxpayers.
Ten bailed out US banks have been cleared to pay back a combined $68 billion (£41 billion) of government aid in a move greeted by investors as a sign that stability is returning to the sector.
The Treasury said that it had told ten institutions that they had raised enough new capital to enable them to repay loans made under the Troubled Asset Relief Program (Tarp).
Several banks, including JP Morgan Chase, Capital One Financial, Morgan Stanley and BB&T Corporation, immediately announced that they would take up the offer.
JPMorgan said that it would repay in full a $25 billion investment along with dividends. Jamie Dimon, the group’s chairman and chief executive, said: “Paying back Tarp at this time is the right thing for JPMorgan Chase, and it’s the right thing for our country.”
The others said to have been cleared were Goldman Sachs, Bank of New York Mellon, Northern Trust, State Street, American Express and US Bancorp. Many of the banks had winced at the restrictions accompanying the bailout funds, such as limits on executive pay.
The Treasury said in a statement that the repayments “follow a period in which many banks have successfully raised equity capital from private investors”. Timothy Geithner, the Treasury Secretary, said: “These repayments are an encouraging sign of financial repair but we still have work to do.”
US shares were flat on the news as investors fear that an oversupply of government debt could push interest rates higher. The Dow Jones industrial average inched up by 1.43 points or 0.02 per cent to 8,763.06.
Loans Calculators Blog- loans rates blog for news about interest rates- unsecured and secured loans, mortgages, remortgages and refinancing including home loans, equity release and consolidate debt loans.
Ten bailed out US banks have been cleared to pay back a combined $68 billion (£41 billion) of government aid in a move greeted by investors as a sign that stability is returning to the sector.
The Treasury said that it had told ten institutions that they had raised enough new capital to enable them to repay loans made under the Troubled Asset Relief Program (Tarp).
Several banks, including JP Morgan Chase, Capital One Financial, Morgan Stanley and BB&T Corporation, immediately announced that they would take up the offer.
JPMorgan said that it would repay in full a $25 billion investment along with dividends. Jamie Dimon, the group’s chairman and chief executive, said: “Paying back Tarp at this time is the right thing for JPMorgan Chase, and it’s the right thing for our country.”
The others said to have been cleared were Goldman Sachs, Bank of New York Mellon, Northern Trust, State Street, American Express and US Bancorp. Many of the banks had winced at the restrictions accompanying the bailout funds, such as limits on executive pay.
The Treasury said in a statement that the repayments “follow a period in which many banks have successfully raised equity capital from private investors”. Timothy Geithner, the Treasury Secretary, said: “These repayments are an encouraging sign of financial repair but we still have work to do.”
US shares were flat on the news as investors fear that an oversupply of government debt could push interest rates higher. The Dow Jones industrial average inched up by 1.43 points or 0.02 per cent to 8,763.06.
Loans Calculators Blog- loans rates blog for news about interest rates- unsecured and secured loans, mortgages, remortgages and refinancing including home loans, equity release and consolidate debt loans.
Labels: consolidate debt loans, interest rates, sub prime loans
