Goldman Sachs in talks to hand back US$10b bailout

Goldman Sachs is in talks to hand back the US$10 billion ($17.87 billion) it received from the United States Government last year, and could be the first major bank to free itself from the strings attached to taxpayer money.

The Government cash, although given to Goldman on advantageous terms, comes with limits on executive pay and increasingly intense public scrutiny of its business practices.

Wall St bosses, watching the furore over bonuses paid to executives at the collapsed insurance firm AIG over the past week, are keener than ever to return public funds, as soon as conditions allow.

Goldman believes it could safely return the money now, although it is expected to wait until after the US Treasury completes its "stress tests" of major banks' balance sheets by the end of next month.

Other major banks, including JPMorgan Chase, which received US$25 billion, are also said to be hoping to return cash soon.

Goldman has held informal talks with Treasury officials and is expected to hand back the money within weeks, if the Government agrees.

The bank had more than US$100 billion of cash and liquid assets on its balance sheet at the end of November, according to its annual results.

Former Treasury Secretary Hank Paulson forced the chief executives of nine of the nation's largest banks to accept a direct infusion of taxpayer money in October.

The aim was to restore confidence in the US banking system and to avoid the stigma of singling out only weak banks for direct aid.

Weaker institutions, such as Bank of America and Citigroup, have since been forced to take additional taxpayer funds to avoid collapse.

The Obama Administration has added to the strings attached to
Government funding.

- INDEPENDENT