by Calculated Risk on 5/18/2009 04:56:00 PM

From Bloomberg: Goldman, JPMorgan, Morgan Stanley Said to Apply for TARP Exit

Goldman Sachs Group Inc., JPMorgan Chase & Co. and Morgan Stanley applied to repay the combined $45 billion they received in October from the government’s Troubled Asset Relief Program, said people familiar with the matter.

The three New York-based banks need approval from the Federal Reserve ...

The refunds would be the first by the biggest banks that participated in the program. As of May 15, 14 of the smaller banks that received capital under the program had already repaid it ...

Selling non-guaranteed debt is a prerequisite for repaying TARP money. ... The banks will also have to decide whether to try to buy back the warrants that the government received as part of the TARP investments.

This will separate the strong banks from the weak.