US banks must repay warrants

THE TEN US banks who were given approval this week to start paying back $68bn (&pound;41.6bn) worth of loans from the state will have to shell out another $5.1bn to redeem warrants held by the US Treasury if they want to be free of government restrictions.<br /><br />Credit Suisse estimates that the Treasury holds warrants &ndash; the right to buy stock at a fixed price for 10 years &ndash; worth up to $5.1bn in the banks. The lenders will have to buy the warrants back to escape restrictions on business activities and executive perks attached to the Troubled Asset Relief Programme (Tarp).