THE US Treasury yesterday gave the green light to 10 Wall Street banks to begin repaying $68bn (&pound;41.7bn) in state funding they received as part of the Obama administration&rsquo;s Troubled Asset Relief Programme (Tarp).<br /><br />The banks finally received permission to begin paying back the funds, which are held by the US Treasury in the form of preferred stock, after demonstrating that they were able to raise capital on the open markets.<br /><br />The government did not name the banks cleared to begin repayment, but it later emerged that they are JPMorgan Chase, Goldman Sachs, Morgan Stanley, Bank of New York Mellon, American Express, US Bancorp, Capital One Financial, BB&amp;T, State Street and Northern Trust.<br /><br />&ldquo;These repayments are an encouraging sign of financial repair, but we still have work to do,&rdquo; said Treasury secretary Tim Geithner.<br /><br />Financial institutions that took funds under the $700bn Tarp programme have been desperate to get out from under restrictions attached to the scheme, particularly constraints on boardroom remuneration.<br /><br />The lenders which have now been cleared to begin repayment are those who were able to show their ability to raise capital quickly, following a period of &ldquo;stress testing&rdquo; by US regulators.<br /><br />The regulators examined 19 banks to determine their exposure to toxic assets and measure their resilience in the face of further economic decline.<br /><br />Nine were deemed strong enough to continue without extra capital, while the remaining 10 have all had capital-raising initiatives approved.<br /><br />However, all had to demonstrate their ability to raise capital, regardless of whether they needed it, as a condition of Tarp repayment.<br /><br />The Congressional Oversight Panel, which supervises Tarp, reported yesterday that regulators should continue stress testing until banks have rid their balance sheets of toxic assets. &ldquo;The fact that the holding companies have added certain amounts of capital on certain assumptions does not mean the financial crisis is over or that the holding companies are now free from the risk of the sort of crisis-laden conditions,&rdquo; the report said.