Bank of America inches towards independence

BANK of America (BoA) is understood to be edging closer to freeing itself of government restrictions on pay by returning some of the $45bn (&pound;28bn) in bailout money it received from the state last year.<br /><br />The bank, which was forced to take state aid despite insisting that it did not need to do so, is thought to be ready to pay back $20bn of its Troubled Asset Relief Programme (Tarp) money.<br /><br />Repayment of the funds would see the bank removed from the list of banks in receipt of &ldquo;exceptional&rdquo; aid.<br /><br />The categorisation has seen its pay plans subject to review by President Obama&rsquo;s new pay tsar Kenneth Feinberg, with its 2009 compensation proposals still awaiting approval.<br /><br />BoA, led by chief executive Kenneth Lewis, also hopes to escape a separate deal under which the state would help absorb losses on assets owned by BoA and Merrill Lynch.<br /><br />The bank was due to cover the first $10bn in losses, with the US government picking up 90 per cent of the remainder in exchange for $4bn in preferred stock paying an 8 per cent dividend worth about $320m.<br /><br />Regulators want the bank to pay $500m to exit the scheme.