It strikes us, and most people, that TARP-related restrictions aren’t all that severe. Today’s new pay limits, for example, are rather toothless. Nonetheless, Goldman Sachs says the TARP comes with too many strings, and it wants to pay back the government ASAP.
Reuters: Compensation restrictions and certain capital requirements were part of the original injection, and extra limitations may be in store after U.S. President Barack Obama imposed tough new rules limiting pay for companies receiving government aid.
“We would like to get out from under that,” Viniar said, adding that the bank aims to pay back the $10 billion this year.
Given that TARP-related restrictions could continue to grow more severe, if Goldman can pull it off, then it’s smart. But, then, Goldman has tapped the FDIC to raise money. There’s something untoward about getting out from under the TARP with money backed by a separate agency. That being said, they have shown the ability to raise money without government backing.