Geithner Says Repayments Depend on Overall Credit Needs

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Source: WSJ

WASHINGTON -- The decision to allow U.S. banks to repay federal government funds will largely depend on the credit needs of the broader economy, Treasury Secretary Timothy Geithner said Tuesday.

U.S. regional banks fell on Tuesday as several firms posted quarterly results that echoed the weaknesses reported earlier by their money center cousins, but they lacked the investment banking and trading businesses that helped their bigger rivals. (April 21)

Mr. Geithner, in an appearance before an oversight panel on Capitol Hill, said the Treasury welcomes some banks repaying funds from the $700 billion Troubled Asset Relief Program. Such actions would help "differentiate" the health of various firms.

When making the decision, however, Mr. Geithner said federal regulators will look at whether an individual bank's repayment would result in a reduction in the overall credit available in the economy.

"My basic obligation is to make sure the system as a whole...has the ability to provide the credit that recovery requires," Mr. Geithner said, calling it "the ultimate test." The appearance was before the Congressional Oversight Panel, one of several entities overseeing government bailout efforts....

Read more: http://online.wsj.com/article/SB124031918187138983.html#mod=whats_news_free?mod=igoogle_wsj_gadgv1

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Wait....So we may not ALLOW banks to pay us back?

[Alcibiades]

1. It's not like they are lending it

Get it all back ans start over.

[Igel]

2. "So we may not ALLOW banks to pay us back?"

Yeah, I'd really like to see the text of the agreement. I don't trust the media to present it properly, but it's gone from, "Everybody take the money, even if you don't need it--we are in it for you guys." After all, Chase said it would use it in acquisitions, presumably of weak banks, and that was fine.

The agreements included terms for repayment, and for paying interest. But they were loans.

Then strings were retroactively applied. Now the loans, if Geithner's words are taken at face value, make private business retroactively the servants of political appointees. And if private business doesn't like it, tough--they can't get out of it by repaying the loans.

If that were done to any of us, we'd be screaming bloody murder.

[xchrom]

3. i thought the business of a bank was to loan?

if banks aren't healthy enough to go about the business of lending -- well something isn't 'adding' up here -- and they want to pay back the 'bail-out' -- what kind of state are they in?

which leads me back around to where this all started -- how much trouble are we really in?

and it can't be all morgatges and bundles.