Fed exercises caution with TARP exit requirements

06/3/2009 | Bloomberg

The Federal Reserve bolstered its requirements for financial institutions interested in leaving the Troubled Asset Relief Program to keep participants from rebounding back into government aid. JPMorgan Chase and American Express were told about four weeks ago that they had enough common equity to weather a deeper economic downturn, but now they are being required to increase it. "The Fed doesn't want to be criticized for allowing people to repay this and then having the banks say, 'We just don't have the capital to make loans now,'" said Lawrence Kaplan, a lawyer who had worked at the Office of Thrift Supervision.

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