Breaking: TARP Repayment by Banks…Teh Roolz…

Steve Liesman breaking it on CNBC now..Charlie Gasparino has been calling TARP The Roach Motel..

FED: Supervisors now having discussions with several banks to repay TARP

Supervisors are requesting supplemental information for TARP repayment (WTH do they need after stress tests!)

No TARP repayment announcements expected until after June 8th

Supervisor will make recommendations on TARP repayment to the Treasury in batches (so no bank stands alone)

TARP repayment recommendations will be made to Treasury on monthly basis

Source: Treasury to announce process for auctioning TARP warrants in next several days

Treasury plans to spread out auction of warrants over several months


1. After repayment, still have to be able to pass stress test

2. Issue unguaranteed debt (no FDIC backup for you!)

3. Demonstrate ability to self-fund in the market (raising private capital)

4. Approval of supervisor

Dilution from repaying TARP: (Gov’t shares controlled by warrants as % of shares outstanding):

JPM 2.35%

Morgan Stanley 5.22%  (OUCH!)

Golden Slacks 2.42%


May 19, 2009. Tags: , , , , , , , , , . Economy, FDIC, Finance, TARP, Uncategorized, Wall St.

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