INSTANT VIEW: U.S. approves 10 banks repaying bailout funds

NEW YORK (Reuters) - U.S. officials on Tuesday gave 10 of the nation's biggest banks approval to pay back a combined $68 billion of taxpayer money pumped into them to combat the credit crisis.

The Treasury Department did not name the banks but many of them are likely to announce they are making repayments and their names eventually will be published in routine Treasury reports.

The following is reaction from analysts and investors:

MARC PADO, U.S. MARKET STRATEGIST, CANTOR FITZGERALD & CO, SAN FRANCISCO:

"Today we have the announcement of the repayment of TARP. Partly what's that telling you is that banks are spending all their money paying back the government and not doing what that money was intended to do, which was to stimulate the economy and lend that money."

DAVID KOTOK, CHIEF INVESTMENT OFFICER AT CUMBERLAND ADVISORS IN VINELAND, NEW JERSEY

"We now have two categories of 'too large to fail' institutions. Those that are deemed worthy of survival on their own and those that are deemed to require vigilance by the government. Of course, all require vigilance and supervision by the government.The whole process is arbitrary.

"This process evolved after the failure of Lehman Brothers. Post-Lehman policy is that large failures and large scale resolutions are not permitted.

"We have constructed a new form of moral hazard and a new form of implied guarantee. Note that the last huge implied guarantee was extended to FannieMae and Freddie Mac and we know what eventually happened there. TARP is really a trap."

CRAIG PECKHAM, EQUITY TRADING STRATEGIST AT JEFFERIES & COMPANY IN NEW YORK

Repayment:

"I don't think that is at this point terribly surprising to the market place. Repayment of these loans had been increasingly discounted into investors' expectations going into today.

In the financials, it feels a little bit like it could be 'sell on the news.'

What you'll see, and you're already seeing, is individual banks themselves will raise their own hands independently and identify themselves in that regard.

If you're a bank you absolutely want to communicate to the marketplace you're going to be repaying TARP funds because that's something you're going to brag about."

BULENT BAYGUN, HEAD OF U.S. INTEREST RATE STRATEGY, BNP PARIBAS, NEW YORK