IT WAS less of a goodbye kiss and more of a farewell hand-off in the face. Thirteen months after getting government cash from the Troubled Asset Relief Programme, America’s megabanks have stampeded to repay it before the new year, desperate to escape the stigma and meddling it has brought. On December 9th Bank of America (BofA) said it had repaid the $45 billion of preferred stock owned by the state and sold $19 billion of new ordinary shares. Citigroup and Wells Fargo announced similar plans on December 14th. (JPMorgan Chase, the other megabank, repaid the state in June.)

In total this month the government should get $90 billion of preferred stock (really a form of debt) repaid, while the banks will raise some $50 billion of common equity to boost their capital. The state will tear up its loss-sharing agreement with Citi. It also intends to sell its $25 billion of ordinary shares in the bank within a year, although immediate plans to flog $5 billion-worth were put on ice after Citi’s shares dipped too low for the Treasury’s taste. That blip aside, the banks are feeling perkier. BofA, which has struggled mightily to hire a new chief executive, managed to appoint Brian Moynihan, a company insider, to the role on December 16th.

For taxpayers relief at being repaid should be tempered by the fact that they are still on the hook for these too-big-to-fail firms. Regulation could help. The House of Representatives approved a bill on December 11th that avoids immediate surgery but would allow supervisors to beat up banks that pose a “grave threat” by, for example, blocking mergers and even forcing disposals. The bill also says creditors must take a “haircut” of up to 10% if a bank fails. But this is pretty tepid stuff: as soon as creditors sense a failure is imminent, they will refuse to roll their loans over, starting a run. The Senate is still ruminating on its own bill. It may take until the middle of next year for a final law to be passed. One Wall Street hedge-fund manager speaks for many when he says “the banks aren’t afraid” of the government any more.

Read More: – The Economist