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Citi Ready to Repay TARP

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Grupo Financiero Banamex
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Citi got $45 billion from TARP, and now Citi is ready to pay it back. In order to help raise the funds, Citi plan to raise $20 billion by selling new equity. The idea is that by repaying TARP, Citi can get out from underneath the thumb of the “pay czar”.

The news that Bank of America received approval to repay its TARP money sent Citi (and Wells Fargo) into repay mode as well. However, officials have to give banks the go ahead in order to repay the money that they received. Banks know that if they don’t follow BofA’s lead, they could be at a disadvantage, since Bank of America would be able to lure top talent to the organization with large bonuses.

It will be interesting to see how things go, and how many banks line up to repay their money. This is good news for the Obama Administration and tax payers, since it means that the deficit won’t be as large as projected.

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  3. […] The U.S. stock market is heading higher today, thanks to some positive thinking. Economic data hasn’t been all bad lately, and that has investors feeling a little more confident. Indeed, the Dow is nearly 75 points higher, and the Nasdaq is gaining ground as Oracle leads the tech sector higher. Investors are happy to see the latest trade data, which indicates that the trade deficit has narrowed. Also providing a bit of a boost is the fact that continuing claims continue to fall in terms of joblessness. Focusing on the continuing claims is allowing investors to shrug off the data about the latest initial claims, which rose. It’s not hurting that Citi is joining the ranks of those who want to repay TARP. […]

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