RBC Capital notes, based upon the new Basel III capital ratios, many TARP banks have capital ratios that exceed the new requirements. RBC believe banks with TARP may be able to make a case for paying back TARP without raising capital due to Basel III and the improved profit outlook for the banks. The bank regulators have been able to hold TARP recipients "feet to the fire" when they paid-off TARP. Today, with clarity on capital ratios, TARP banks that exceed the Basel III capital requirements may be able to pay-off TARP without a capital raise.
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