Banks Need to Prove Business Ability Before Returning Funds

WASHINGTON (AP) - A senior government official says banks that
want to return government bailout funds will have to first show
that they can do business without the help of federal guarantees.

The federal government on Wednesday is expected to issue
guidelines to banks that have received money from the $700 billion
Troubled Asset Relief Program and now want to return the money.
That would free the banks from federal restrictions on executive
compensation.

The official, speaking on condition of anonymity because the
standards have not been made public, said banks will have to
demonstrate that they do not need debt guarantees provided by the
Federal Deposit Insurance Corp. The FDIC program allows financial
institutions to borrow money at lower costs.


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