RTTNews - The U.S. Department of Treasury announced Tuesday that 10 of the largest U.S. financial institutions borrowing money from the Treasury are planning on paying back their loans. Organizations such as JP Morgan Chase (JPM), U.S. Bancorp (USB) and Bank of New York Mellon (BK) will repay a total of $68 billion.
Combined with repayments received to date from other institutions, the Treasury will have received approximately $70 billion in repayments from capital purchase program, or CPP, participants. The Treasury invested nearly $200 billion in over 600 banks across the country as part of an effort to stabilize the financial system.
These repayments are an encouraging sign of financial repair, but we still have work to do, Treasury Secretary Tim Geithner said.
Following consultation with the primary banking supervisor of each institution, Treasury has notified the institutions that they are now eligible to complete the repayment process, a Treasury Department statement said.
It added, If these firms choose to do so, Treasury will receive 68 billion US dollars in repayment proceeds.
Speaking to U.S. lawmakers, Geithner said that he plans to begin the reform of the U.S. regulatory system soon.
In the next few weeks we will outline a comprehensive plan of reform that will include systemic risk regulations to ensure that no large and interconnected firm or market can take on so much risk that its failure could destabilize the entire financial system, Geithner told a subcommittee of the Senate Appropriations committee.
The plan calls for bolstering consumer and investor protection. And it will streamline our out-of-date regulatory structure so that our regulatory system matches the size, shape and speed of our modern financial system, he added.
The patchwork regulatory system has been a source criticism from lawmakers, who cite lax regulatory standards for worsening the financial crisis. A more macro-prudential, or system-wide approach has been suggested, with the Federal Reserve playing a key role.
Together, these changes will help prevent another crisis of the magnitude that we have just lived through, and give the government new tools to better cope with similar problems should they occur in the future, Geithner said.
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