Geithner sees more bank TARP repayments soon

U.S. Treasury Secretary Tim Geithner said he expects the “vast number of banks” that borrowed money from the government during the financial crisis to repay the debt fairly soon, and expressed confidence that the economy is slowly reviving.
DEC 04, 2009
U.S. Treasury Secretary Tim Geithner said he expects the “vast number of banks” that borrowed money from the government during the financial crisis to repay the debt fairly soon, and expressed confidence that the economy is slowly reviving. “I expect you'll see the capital come back fairly quickly,” he said of the billions of dollars that banks last year borrowed to build up their capital levels. Several strong banks have repaid about $70 billion of their borrowings under the Troubled Asset Relief Program, including J.P. Morgan Chase & Co. and Goldman Sachs Group, but dozens of others are still too weak to have gotten the go-ahead for repayments. “I expect you'll see the capital come back fairly quickly,” Mr. Geithner said at the annual meeting of the Securities Industry and Financial Markets Association in New York on Tuesday. He noted, however, that some companies in the automobile and finance industries continue to struggle. “In the event of a slow recovery in auto sales it is going to take some time for the government to be repaid,” he said. Asked what it would take to diagnose the problems of the car industry the former New York Federal Reserve President replied: “You need to make products that people want to buy.” Mr. Geithner said he expects that the government's bailout costs from the emergency lending authority last year will be less than estimated earlier this year, and also said it is likely that Congress will extend unemployment benefits as part of a program of near-term relief for the economy. But he said it is too early to discuss whether to consider substantial additions to the government's infrastructure project stimulus plan. The Treasury Secretary also told the audience of financial industry executives that it is in their best interests to support substantial regulatory reform. “Some of it will be about more regulation,” he said. “The best-run institutions in the country have a strong interest in…reform.”

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