21 May 2009

$US25 billion expected to be repaid by banks

5:33 am on 21 May 2009

Financial institutions in the United States are to repay $US25 billion of bail-out funds over the next year.

Treasury Secretary Timothy Geithner told Congress the money will be used to further assist institutions in need of financial help.

Including the anticipated repayment, he estimated that $US123.7 billion was left from the the $US700 billion financial bail-out fund approved by Congress in October.

He also said the financial system was starting to heal. In testimony before the Senate Banking Committee, Mr Geithner said the remaining money would be used to further strengthen bank balance sheets and to assist the US auto industry.

He also said that a public-private partnership to help banks get rid of their toxic assets will begin operating in the next six weeks.

The BBC reports the programme combines up to $US100 billion in federal funds with private money in order to create a fund that would have the ability to buy up toxic assets, with the Federal Reserve providing most of the lending.