U.S. bailout repayment seen bigger than expected: report

The Obama administration is expected to announce next week that a higher-than-expected number of large financial institutions will be allowed to repay their government bailout funds, the Washington Post reported in its Saturday edition.

Citing unnamed sources who spoke on the condition of anonymity because the official announcement has not been made yet, the newspaper report said the size of the repayments may be twice the initial estimate of $25 billion.

That could mean that nearly all of the nine institutions found to have sufficient reserves in a recent government-run stress test might be allowed to return the money under the Treasury Department's Troubled Asset Relief Program.

The companies include JPMorgan Chase & Co , American Express Co , Bank of New York Mellon Corp , BB&T Corp , Capital One Financial Corp , Goldman Sachs Group Inc , State Street Corp and U.S. Bancorp . MetLife Inc >, the ninth company, did not take money from TARP.

Institutions want to repay the government as soon as they can in order to get out from under some unwanted obligations such as executive compensation restrictions, dividend payments, among others.

The government also sees repayments as a positive sign for financial institutions that have raised more capital than needed to exit the bailout program.

The newspaper report also said Treasury could unveil rules on executive compensation for bailout-assisted institutions as early as next week.

Executive compensation practices at Wall Street firms will be the subject of a congressional hearing scheduled for next week.

The House Financial Services Committee is planning a June 11 hearing focusing on how to eliminate compensation practices that encouraged excessive risk-taking and contributed to the financial collapse and ultimately hurt the U.S. economy.

Executives have a perverse incentive to expose their companies to more and more risk, but only the shareholders realize the downside of bad bets, the committee's chairman, Democrat Barney Frank, said in a statement.

(Reporting by John Poirier; Editing by Eric Beech)