"Mike Cavanagh talks to CNBC about TARP repayment"

Mary: Now, as we mentioned earlier, we do have a special guest joining us... it's JPMorgan Chase's Chief Financial Officer Mike Cavanagh in a CNBC Worldwide Exclusive. Mike, thanks so much for joining us.

Mike: Glad to be here, Mary. Thanks.

Mary: You know, earlier your boss, CEO Jamie Dimon said' or referred to TARP... as Traumatic TARP and as a Scarlet Letter, so I have to ask you... was there dancing in the hallways when you received official word from the government that you could repay that $25 billion'

Mike: None at all. It's actually... you know, first let me just say... we're glad to be able to repay today. It's good news. We think it's the right answer for the system and for the country to take the strongest banks and allow them to repay cause the government obviously has tremendous pressures on it and needs to put the money to places where the money can be used well... and given the strength of our capital position, which put us in a position to repay, confirmed by the stress test that we just went through, we'll have ample capital... $118 billion, 9.3% Tier One at the end of this quarter... even after repaying TARP, so that's really how we see it. It's a good thing for the system, so we're glad to able to repay today.

Mary: OK, you are repaying it today then' And how are you gonna repay it'

Mike: The repayment is as soon as we get it scheduled with the Treasury Department... closing details' probably the middle of next week to make that happen... but we're approved to pay today and we intend to do so as soon as we can.

Mary: OK, great. Have you been given any indication by the Government as to when you might be able to buy back the warrants and how you can go about doing this'

Mike: We'll get underway with them... uh, conversations to repurchase the warrants per the announcement this morning at fair market value. So we'll start those conversations right away with the Treasury Department. But no sense on timing on that.

Mary: OK, removing or repaying the TARP, I should say, removes restrictions on your bank concerning executive compensation and dividends, but do you have any indication from the Government about the restrictions it replaced on TARP banks when it comes to hiring foreign workers. I know this was an issue that Mr. Dimon pointed out at the annual meeting.

Mike: All of the specific restrictions that we all know that related to the TARP Investment relate to the TARP Preferred, so those will follow once the TARP Preferred is repaid.

Mary: OK, I have to ask you. What kind of an advantage does this give you over your competitors in terms of acquisitions, in terms of hiring, in terms of taking market share'

Mike: Well, I mean, I think any competitive advantage we have is on the back of the strong businesses we have, the great people and the business momentum we have, which is actually, you know, quite good. I wouldn't say it has anything to do with having or not having the TARP Preferred capital and our competitors will do quite a good job giving us a run for the money with their own set of advantages, so like I said, glad that we're repaying today cause a lot of the things you're mentioning are things we put into categories of distractions that were all about the perception of TARP that we're glad to leave those behind, but it's not really the primary thrust of why we're glad to be repaying this week.

Mary: OK, one last question is that JPMorgan has been, like the other banks, able to sell debt that is not backed by the FDIC. Do the banks plan to stop using all Government or all programs that have a Government guarantee now'

Mike: That's my expectation, as you know, we've issued substantial amounts of non-guaranteed debt over the course of the last several months and again today, I believe, so that is something that, my expectation is we won't be using that FDIC program any longer and it expires in a couple of months in any case.

Mary: Just a quick question. How much more expensive is that going to be for you'

Mike: Not that much actually. We were probably the least benefited by... given the better credit rating and the better perception of our company, so our credit spreads are the tightest of the banks' so we'll give up 50 basis points maybe in issuing our debt but not a substantial amount really.

Mary: OK, Mike, thanks so much.

Mike: Glad to do it, Mary. Thank you very much.

Mary: Sure, we've been speaking with Mike Cavanagh, the CFO of JPM Morgan Chase.