Holding company nee investment bank Goldman Sachs is looking to repay its government debt sooner rather than later, and in doing so may push its peers to follow a similar path, according to Reuters. Goldman, which has received $10 billion in Troubled Asset Relief Program (TARP) money, hopes to repay the debt as soon as next month, according to sources close to the situation.
Speedy repayment of the $10 billion is intended to defer undue government attention and meddling into company affairs, say analysts. “If you’re a fairly well-capitalized bank, you don’t want the government looking over your shoulder,” financial institutions practice lawyer Jerry Blanchard of Bryan Cave’s Atlanta office told Reuters.
Goldman’s decision to rush its repayment of the TARP debt may inspire other financial heavyweights to do the same. Analysts say that Citigroup, JPMorgan Chase, Northern Trust, PNC Financial Services, and U.S. Bancorp, along with several other smaller lenders are also looking to repay government bailout funds.
Some banks may view repayment as a show of confidence and stability, says Michael Yoshikami of YCMNET Advisors. “If you can repay TARP money, and still operate with good capital reserves, you’re essentially saying you’ve passed your own internal stress test,” he told Reuters.