It looks like the healthiest of the major banks will be the first to return its TARP aid — money that has come with all kinds of new restrictions since it was doled out.
The New York Times’ Andrew Ross Sorkin says that Goldman Sachs (GS) is looking to return its $10 billion in TARP aide very soon, possibly as early as next month. Previously, its CEO Lloyd Blankfein had suggested the money could be returned by the end of the year.
Why the quick turnaround? No doubt, it’s the business restrictions which seem to grow every day. On Goldman insider told Sorkin: “It’s just impossible to run our business in this environment.” Apparently the company has already had a series of meeting about returning the cash, including one with Barney Frank.
Sorkin brings up an interesting point though, which is that not giving back the money could be seen as a new sign of weakness. Remember: Part of the reason for making TARP compulsary was so that there wouldn’t be a stigma about taking it. But unless you force banks to keep it — a politically unpopular idea, given the cries of “GIVE IT BACK!” — then this seems unavoidable.