The majority of U.S. banks have more capital than they need, Treasury Secretary Timothy Geithner said before the TARP's Congressional Oversight Panel on Tuesday.
Uncertainties surrounding the banking system have caused banks to withhold loans, the lawmaker said.
He also said the increased liquidity pumped into the toxic debt market is helping to determine values for illiquid securities. Uncertainty surrounding the true value of toxic assets is making it difficult for financial institutions to raise further capital, he said.
In a letter to the panel sent on Monday, the Treasury Secretary said the Treasury Department projects that the TARP has $109.6 billion in capital, but expects that $25 billion will be repaid over the next year. The TARP effectively has $134.6 billion in funds.
According to Geithner, the $25 billion expected to be repaid was a "conservative" estimate, backed by private analysis.
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