There’s some good financial news this week – banks are paying back their TARP money to the federal government.
When the TARP program first rolled out, there were 19 major banks that received money from TARP, along with some smaller banks.
One of the conditions of the program was before they could pay the money back, the banks had to show that they could raise money themselves.
To the surprise of many, they did just that – and did it quickly, essentially raising $65 billion in stock since May 7, and making another $20 billion by issuing bonds during that same time period.
This is good enough to allow ten banks to pay back the government in full -- a total of about $68 billion.
All of this is good news, because the government can start pulling out of the financial sector, they’re getting that TARP money back with interest, and it’s also showing that private investors are starting to believe in the banks and the credit markets once again.
