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Banks and savings

American banks want to repay government aid

The US banks Morgan Stanley, JPMorgan and Goldman Sachs want to repay the combined aid of $ 45 billion provided under the TARP asset relief program. This is the largest repayment in the program since its meeting in June last year, when Congress tried to resolve the situation following the big Lehman Brothers and set aside $ 700 billion.

The New York banks were among the top nine in which US Treasury Secretary Henry Paulson persuaded them to accept aid, for a total of $ 125 billion. Of the small banks, it was repaid by thirteen of the nineteen large ones, which, until recently, were waiting for the results of the stress test, but are the first to change. First, for some good results from these tests, they paid off. These tests were intended to determine how much extra capital banks would need in the event of an escalation of the negative situation in the US economy.

While Goldman Sachs and JPMorgan do not need the added capital according to test days, Morgan Stanley does, but compared to other banks, only a small amount ($ 1.8 billion) and the bank managed to replenish its capital by $ 4.6 billion through sales assistance. svch action.

The current US Treasury Secretary, of course, confirmed that repaid uvt. Banks will go to need approval from their central bank regulator, the Fed. One of the reasons why banks resort to this step is that they want to try to avoid the various management compensation restrictions that have been imposed on beneficiaries under the TARP program.

However, these banks could have a problem with their repayment in the future. Some of the first ones made it known that even if the banks did not anticipate the situation and gave their own help again in the future, they could elite alobm. Representatives Morgan Stanley and Goldman Sachs also stated that they were of the opinion that they were allowed to repay it.

Among other things, these are, first of all, the repayment of aid from the TARP program, which helps to record the London interbank annual rate LIBOR in record. For this rate, banks borrow pensions from each other. On Monday and September, the TMSN LIBOR rate fell by 7 basis points to 0.75%. Today it was the 35th day in the ad, when the rate fell.

The yard in the credit markets is thus renewed. This is confirmed not only by the LIBOR rate itself, but also by the so-called TED spread, which is calculated as the difference between the LIBOR rate and the annual rate at which the US government pays for its pension. The TED spread fell to 58 basis points, which is eight quarters or not in June last year. It is proof that economic entities have two banks, similar to the US government, in terms of fulfilling their volume.