The Financial Times has reported that Goldman Sachs, JPMorgan Chase, and American Express were expected to be in the first wave of major lenders permitted to pay back TARP funds.
The banks scramble to repay as they want to show their strength to the market and to keep themselves away from tighter regulations. They can operate free of federal limits on executive pay and other restrictions once they repay the money.
Banks which desire to repay TARP money must be capable of replacing the funds by raising capital without guarantees from the Federal Deposit Insurance Corp.
Regulators have said that they will consider those that are well-capitalized and can raise debt without government guarantees – as quoted in Reuters.
