Goldman's Share Price Up - Tarp, Publicity and Confidence?

'Maria' wrote this:

If banks were able to use TARP money without anybody knowing, how will investors know if other banks have in fact used it?

Does the GS repayment of their TARP money tell them that?

No Goldman's problem.

In any case, since the funds are lent confidentially still nobody knows whether and which banks have made use of the facility and if so to what extent.

'Mel Rowing' wrote this:

That's pretty much what I wrote 40mins earlier, Mel :-)

Evidently, but that was not the question!

They know that Goldman used £10bn because they are paying it back publicly! Other banks not paying back indicates that they might have borrowed and can't pay it back, knocking the confidence on the banks again. Wouldn't it have been better if the paying back was also confidential?

They won't - that's my point.

It tells them that one bank is capable of paying it back, and that others that are not publicly paying it back might be in trouble, but they won't know for sure because the lending was confidential so they don't know who borrowed in the first place. It just adds to the uncertainty.

The operative word "might" could just as easily be replaced by "might not" or alternatively others might have paid back quietly. There's no way of telling. Goldman, in paying back publicly, are simply making a statement to the market that, as regards them, things are looking up.

Like with all investments, you pays your money and you takes your pick.

'Maria' wrote this:

But those same investors are free to assume that other banks didn't borrow TARP money, so have no reason to mark down their shares.

I realise all of that, but this is not a normal scenario - Tarp is not 'normal' - the context is the government bailing out banks which were under threat of collapse and causing a general collapse in the stock market! Normal rules do not apply...why have new rules and measures designed to prevent something from happening (i.e. uncertainty and lack of confidence), but no rules to prevent it happening later along the line when the money is repaid?