The decision to allow U.S. banks to repay federal government funds will largely depend on the credit needs of the broader economy, Treasury Secretary Timothy Geithner said Tuesday.
Mr. Geithner, in an appearance before an oversight panel on Capitol Hill, said the Treasury welcomes some banks repaying funds from the $700 billion Troubled Asset Relief Program. Such actions would help "differentiate" the health of various firms.
When making the decision, however, Mr. Geithner said federal regulators will look at whether an individual bank's repayment would result in a reduction in the overall credit available in the economy.
"My basic obligation is to make sure the system as a whole...has the ability to provide the credit that recovery requires," Mr. Geithner said, calling it "the ultimate test." The appearance was before the Congressional Oversight Panel, one of several entities overseeing government bailout efforts.