It appears that State Street (STT) is the next bank to jump on the payback bandwagon. This morning, the company announced that it plans to sell $1.5 billion of stock in order to help repay government bailout funds. In addition, STT took a $3.7 billion charge to move asset-backed commercial paper conduits to its balance sheet. In addition, STT will sell notes that are not backed by the government. All of these steps are being taken in hopes of repaying the U.S. Treasury for the $2 billion STT received as part of TARP.

The company forecast 2009 operating profit that will fall short of the Street's forecast, thanks to a "marginally weaker" environment than anticipated.

STT was one of the 19 banks that was put through the government's stress tests in order to see how it could handle a deep recession. The good news is that STT was one of the nine banks that were found to need no more capital.

The bank is joining the parade of banks trying to repay the government, mainly because of the restrictions that the government attached to the payment. Another reason for the repayment is that investors believe that holding onto TARP funds is a sign of weakness.

I find that a bit confusing. If a bank can make moves to help pay back the TARP funds, why didn't it take these steps before it needed the funds? Perhaps I am over-thinking the situation (something I can say with veritable certainty I have never been accused of before), but I think that all of the banks (not just STT) attempting to pay back the TARP funds may have been better served to take these repayment steps before accepting the money.

Again, I may be simplifying the issue, but I really think repaying TARP funds is like closing the barn door after the cows have escaped. Several of the nine banks (STT included) that did not need the capital are trying to repay the funds . . . isn't that nice of them? Such a move should be a legal requirement, not a good faith display. Seriously, it is like these banks are deciding to pay back the government and are making a big deal out of the move.

I have an idea. The next time I send in a payment for either the car or the mortgage, I will call a press conference and announce that I intend to pay back every penny that I borrowed. Isn't that the point of a loan? You are lent money and are expected to pay it back. Well, at least that is the way that it works in the "real world." I have an idea, anyone out there have a loan with State Street? If you do, don't make your next loan payment, then see if they will bail you out. Either that, or send them a letter stating that you intend to pay back your loan in full. Just let me know how it goes.

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