Three more major financial institutions are seeking to return billions of dollars they received as part of the federal bailout plan.
Jamie Dimon, chairman and chief executive of JPMorgan Chase & Co., said at the company's annual meeting that it should be able to repay the $25 billion it took from the government within the next few weeks.
Goldman Sachs Group Inc. and Morgan Stanley also have applied to redeem the preferred stock they sold to the government through the Troubled Asset Relief Program. Although neither company made a public announcement, their plans were reported by a number of news organizations, including the Wall Street Journal.
Talks with the Treasury Department about withdrawing from TARP a few weeks ago, according to the reports. Both companies received $10 billion in bailout money, giving the federal government stock and warrants in return.
Companies seeking to redeem their shares and warrants must prove they are financial stable without government aid. If they borrow money to shore up their capital ratios, they must do so without relying on guarantees from the Federal Deposit Insurance Corp.
JPMorgan Chase, Goldman Sachs and Morgan Stanley all passed the Treasury's stress tests earlier this month and were told they did not need to raise additional capital.
Those tests assumed that the companies would continue to rely on bailout funding. Nevertheless, a Treasury spokesman told Reuters that he expected the applications would be approved expeditiously.
"I would think we're talking a matter of weeks, and probably just a few weeks, because I think Treasury wants the money, or at least some of it," said the spokesman, who was not identified.
JPMorgan Chase, Goldman Sachs and Morgan Stanley are three of the largest financial institutions to request permission to withdraw from the program. Yesterday, State Street Corp., which received $2 billion from the government, said it has begun a stock offering to raise money to redeem the shares held by the Treasury.
Financial firms have cited a number of reasons for wanting to exit the TARP program, including concerns about executive pay, the right to pay dividends, and other business issues.
Jamie Dimon, chairman and chief executive of JPMorgan Chase & Co., said at the company's annual meeting that it should be able to repay the $25 billion it took from the government within the next few weeks.
Goldman Sachs Group Inc. and Morgan Stanley also have applied to redeem the preferred stock they sold to the government through the Troubled Asset Relief Program. Although neither company made a public announcement, their plans were reported by a number of news organizations, including the Wall Street Journal.
Talks with the Treasury Department about withdrawing from TARP a few weeks ago, according to the reports. Both companies received $10 billion in bailout money, giving the federal government stock and warrants in return.
Companies seeking to redeem their shares and warrants must prove they are financial stable without government aid. If they borrow money to shore up their capital ratios, they must do so without relying on guarantees from the Federal Deposit Insurance Corp.
JPMorgan Chase, Goldman Sachs and Morgan Stanley all passed the Treasury's stress tests earlier this month and were told they did not need to raise additional capital.
Those tests assumed that the companies would continue to rely on bailout funding. Nevertheless, a Treasury spokesman told Reuters that he expected the applications would be approved expeditiously.
"I would think we're talking a matter of weeks, and probably just a few weeks, because I think Treasury wants the money, or at least some of it," said the spokesman, who was not identified.
JPMorgan Chase, Goldman Sachs and Morgan Stanley are three of the largest financial institutions to request permission to withdraw from the program. Yesterday, State Street Corp., which received $2 billion from the government, said it has begun a stock offering to raise money to redeem the shares held by the Treasury.
Financial firms have cited a number of reasons for wanting to exit the TARP program, including concerns about executive pay, the right to pay dividends, and other business issues.
published May 19, 2009, 0 Comments
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