Treasury expecting bailout paybacks soon

Goldman Sachs said it intended to return the $10 billion in government funds it accepted in October and J.P. Morgan Chase, which received $25 billion has said it intends to return its bailout funding. The Treasury is intentionally using a conservative estimate of what may come back, The Washington Post reported Thursday.

Concerned over the issue runs two ways. The Treasury is concerned that banks could compete with each other by showing their strength with payback plans, perhaps rushing to return funds prematurely. The limit to the Treasury's resources are also a concern, the newspaper said.

Should one or more of the 19 large banks undergoing Treasury Department stress tests fail, it will be difficult to ask Congress for more funding, given the shift in sentiment in Washington since the start of the year, the Post said.

Treasury officials said $303 billion of the original $700 billion bailout fund has been allocated, leaving some funds for additional assistance. The Treasury can also shift funding from other bailout programs that are not yet depleted, the Post said.

Copyright 2009 by United Press International.