Banks 'rush to repay Tarp funds' as rates investigation looms

16 April 2009

US retail banks are scrambling to repay bailout funds they received under the taxpayer-funded Troubled Asset Relief Program (Tarp) in order to free themselves of the restrictions imposed by the scheme, it has been reported.

Goldman Sachs became the first institution to move towards paying back its $10 billion bailout when it announced a share issue for private investors designed to raise $5 billion.

According to the Guardian, Bank of America and JP Morgan are also keen to get the government out of their boardrooms by paying back their emergency loans.

A total of $310 billion was paid out to top US banks under Tarp. Banks will only be allowed to pay their loans back if they pass 'stress tests' currently being carried out by the Treasury.

In other news, banks that received bailout funding are to face an investigation over "hikes" in their interest rates, fees and customer penalties, the Independent reports.

Elizabeth Warren, the Congressional appointee overseeing Tarp, said her report would look at whether the higher charges meant taxpayers are effectively "paying twice" to support the financial sector.

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