Tarp, Bank Bailout | featured news

Treasury Secretary Timothy Geithner on Wednesday moved to extend the government's $700 billion bailout fund into October 2010 and pledged to deploy no more than $550 billion of it.

The Obama administration, buoyed by a resurgent Wall Street, plans to cut the projected long-term cost of the Troubled Asset Relief Program by more than $200 billion, in a move that could smooth the way for the introduction of a new jobs program.

The U.S. Federal Reserve this month asked banks that were part of "stress tests" conducted earlier this year that have not yet repaid money injected under the Troubled Asset Relief Program (TARP) to submit plans to do so, a person familiar with the situation said on Tuesday.

Obama is set to announce initiatives aimed at boosting credit to small businesses, including measures to make it easier for small banks to access TARP.

With the wiring of nearly $10 billion to the Treasury, U.S. Bancorp and BB&T became the first large financial institutions to announce that they have repaid the government in full.

U.S. officials on Tuesday gave 10 of the nation's biggest banks approval to pay back a combined $68 billion of taxpayer money pumped into them to combat the credit crisis.

Administration could announce as soon as Monday that repayment can begin, but some officials warn that other types of support belie show of progress.

Citigroup will lend up to $5 billion in TARP funds in a municipal program to help finance construction of schools, airports, hospitals and other infrastructure products.

Capital One Financial joined U.S. Bancorp and BB&T, saying it would offer common shares as it looks to raise cash and pay back its TARP funds.

Banks that want to pay back their federal bailout funds and free themselves from government restrictions on compensation and dividends will have to sever their ties to another financial assistance program.