Intensifying the capital assessment of the banks aided under the government's Troubled Asset Relief Program, - TARP - the Federal Reserve officials last week surprised bankers by demanding an increase in their specific amounts of new capital, prior to repayment of taxpayer funds. The bank regulators' latest decision - after the 'stress tests' conducted in May - has yanked the capital planning of bankers.

Having raised the standards for banks' TARP repayments, the regulators have now asked JPMorgan Chase and American Express to boost common equity. Surprisingly, almost a month back, these companies were informed they had sufficient capital to survive a deeper economic crisis!

In fact, as Morgan Stanley, JPMorgan and American Express came to know of the most recent hurdles to leave TARP, they raised $7.7 billion this week. In a conference call, JPMorgan's Chairman Jamie Dimon said that the company believes it has fulfilled all the requisite terms and conditions to "get out of TARP."

Commenting on the latest move by the regulators, Lawrence Kaplan - ex-attorney at the Office of Thrift Supervision - said: "The Fed doesn't want to be criticized for allowing people to repay this and then having the banks say we just don't have the capital to make loans now. It's an exercise to make sure that no one is going to get criticized for allowing these redemptions."