Another leading financial institution plans to return the bailout money it received last year.
The American Express Co., which became a bank holding company in November in order to qualify for $3.4 billion in government funding, said in an earnings release that it plans to return the money as soon as possible.
"If permitted by our supervisors and if supported by the results of the stress assessment, we intend to repay the government investment of preferred shares and warrants," said Kenneth I. Chenault, chairman and chief executive.
The Treasury Department has said it is willing to accept the early return of bailout money by companies that can prove they are stable enough to survive without it. For the past few months it has been conducting stress tests on the largest 19 institutions that got bailout money to examine how they might fare under worsening economic conditions.
The results are expected to be released today, though how much detail will be made public remains unknown.
American Express's desire to return the money marks a significant turnaround in corporate perceptions of the Troubled Asset Relief Program. When it began, American Express joined a number of other non-banking firms restructuring themselves or buying banks in order to qualify for the program.
At the time, the firms saw an opportunity to access inexpensive credit. Since then, many have struggled with public relations headaches and concern about regulations restricting executive pay.
The original agreements that the TARP recipients signed say that the preferred stock they issued to the government cannot be redeemed for three years.
The American Express Co., which became a bank holding company in November in order to qualify for $3.4 billion in government funding, said in an earnings release that it plans to return the money as soon as possible.
"If permitted by our supervisors and if supported by the results of the stress assessment, we intend to repay the government investment of preferred shares and warrants," said Kenneth I. Chenault, chairman and chief executive.
The Treasury Department has said it is willing to accept the early return of bailout money by companies that can prove they are stable enough to survive without it. For the past few months it has been conducting stress tests on the largest 19 institutions that got bailout money to examine how they might fare under worsening economic conditions.
The results are expected to be released today, though how much detail will be made public remains unknown.
American Express's desire to return the money marks a significant turnaround in corporate perceptions of the Troubled Asset Relief Program. When it began, American Express joined a number of other non-banking firms restructuring themselves or buying banks in order to qualify for the program.
At the time, the firms saw an opportunity to access inexpensive credit. Since then, many have struggled with public relations headaches and concern about regulations restricting executive pay.
The original agreements that the TARP recipients signed say that the preferred stock they issued to the government cannot be redeemed for three years.
published April 24, 2009, 0 Comments
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