FDIC's Bair: U.S. must be careful with TARP repayments
WASHINGTON (Reuters) - A top U.S. bank regulator said on Thursday that the government needs to be cautious about letting big financial firms repay bailout funds because there will not be more government support going forward.
"I think, in general, they need to be very careful with it," Sheila Bair, chairman of the Federal Deposit Insurance Corp, told reporters on the sidelines of a financial education event.
She also said that so far, the Federal Reserve has been "very careful, very measured" in giving large banks the green light to repay bailout funds, and that the FDIC and other bank regulators have been consulted.
Bank of America (BAC.N) said on Wednesday that the government had given it permission to repay $45 billion in funds from the federal Troubled Asset Relief Program (TARP), freeing the major bank from a host of restrictions.
Eight more large financial institutions remain in TARP: Citigroup (C.N), Fifth Third Bancorp (FITB.O), GMAC, KeyCorp (KEY.N), PNC Financial (PNC.N), Regions Financial (RF.N), SunTrust (STI.N) and Wells Fargo (WFC.N).
Regulators are expected to issue more approvals to repay the bailout funds, which were given to the banks as capital infusions when credit markets seized up last year.
Many institutions have chafed under the program because lawmakers later attached restrictions on executives' pay, share repurchases and dividends.
Federal Reserve Chairman Ben Bernanke praised Bank of America's plans to repay TARP, saying it was "good news."
(Reporting by Karey Wutkowski, editing by Leslie Gevirtz)
