The Bank of America (BAC) move to pay back its TARP obligations lit a fire under Citigroup (C) that has resulted in an agreement to also pay back its TARP loans--something many did not think would be possible just a few months ago. You can bet Wells Fargo (WFC) will be next. To pay back $20 billion and end the guarantees on some troubled debts, the bank will try to sell about $17 billion in common stock this week and issue another $4.2 billion in tangible equity units and subordinated notes. The government will also sell off its massive 7.7 billion share stake in the bank over the next year.

This is an interesting development but one fraught with uncertainty. While the bank's capital levels have recovered, it's still faces some trying times. There cannot be another bailout so if the bank really stumbles again, we'll be in uncharted territory. There are some who assume that Citi was effectively in a form of receivership. Is it really that much better off now?   

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-- here's an article

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