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NEW YORK CITY-The shadow of the Term Asset-Backed Relief Program seems heavy on Citigroup Inc. and Wells Fargo & Co., now that Bank of America Corp. has found a way to repay the American taxpayers and shed the restrictions of the government run program. However, the Federal Reserve and the Treasury are not making it as easy for these two banks to get out, according to the Wall Street Journal.

Bank of America was allowed to repay its $45 billion in federal aid and raised $19.29 billion by selling stock in order to do so. Citi and Wells argue that they should be entitled to similar terms, however the government has pulled back on the reins asking that Citigroup raise $20 billion in common stock to exit TARP, while Wells was told it needed billions as well, says the Journal.

With less than a $100-billion stock-market value, this raises larger and deeper shareholder issues for Citi. Meanwhile, Wells Fargo’s displeasure is tempered by its benefit from the TARP funds, which helped mitigate the debt incurred by a hefty Wachovia Corp. takeover. This is a case in point,according to the Journal, the Fed is leery of a rapid payback, specifically holding an underlying concern that a series of losses could result in these banks having a dearth of capital available.

To read the entire Journal article, click here.

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