US government reaps $10bn so far from proceeds of financial bailouts

Steve Dinneen
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THE US government has earned more than $10bn (£6.5bn) so far from repayments of bail out funds to financial firms, according to a report by SNL Financial.

The figure – which equates to an annualised return of 8.5 per cent – underscores efforts by the industry to speed up repayments and warrant repurchases.

Firms such as Citigroup, which still has common shares held by the US Treasury Department, and rivals that have made partial redemptions were excluded from the analysis, SNL Financial said yesterday.

Proceeds from Troubled Asset Relief Program (TARP) warrant repurchases and auctions led to a surge in returns through 30 March, SNL said. So far, since the start of the programme in late 2008, 64 institutions have fully repaid government aid.

For months, taxpayers baulked at government efforts to help banks, which they saw as the main culprit behind the worst US recession since the 1930s, as the collapse of investment bank Lehman Brothers shook global financial markets in late 2008.

The biggest banks, such as Goldman Sachs and American Express, repaid the money they owed the Treasury last year and earlier this year. Still, more than 600 smaller banks are left in the programme, and owe roughly $130bn. Goldman alone gave a 20 per cent return to taxpayers at the time of repayment last July.