Banks can’t repay TARP

The Obama Administration is signalling that even healthy banks might not be permitted to repay the TARP “loans”, reports the Financial Times:

Strong banks will be allowed to repay bail-out funds they received from the US government but only if such a move passes a test to determine whether it is in the national economic interest, a senior administration official has told the Financial Times.

“Our general objective is going to be what is good for the system,” the senior official said. “We want the system to have enough capital.”

Analysis at Legal Insurrection.  (Via Jim Lindgren, who aptly likens the government to the mob.)

It’s obvious, I guess.  TARP has given the federal government power over the banks; why would they give it up?

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