Banks are ready to pay back one-third of the $200 billion in taxpayer funds invested to keep them solvent last fall, says the U.S. Treasury.

"10 of the largest U.S. financial institutions participating in the Capital Purchase Program [formerly TARP] have met the requirements for repayment established by the primary federal banking supervisors" and "are now eligible to complete the repayment process. If these firms choose to do so, Treasury will receive $68 billion in repayment proceeds," out of around $200 billion invested in 600 banks, Treasury says here.

Who's paying back? JPMorgan Chase & Co., Morgan Stanley, and other relatively solvent banks whose bosses don't like the government bossing them around, limiting their pay and second-guessing their lending and marketing decisions, says Bloomberg LP here.

Who's not ready? PNC Financial Services Group, Pennsylvania's largest lender, which faces an increase in loan losses from newly-acquired National City Corp. in Cleveland, is going to keep its government capital for now, so it doesn't have to raise private money, notes Rochdale Securities bank analyst Richard X. Bove.

"These repayments are an encouraging sign of financial repair, but we still have work to do," Treasury Secretary Timothy Geithner said in the government statement.

What's in it for the taxpayer?  "Firms that repay their preferred stock have the right to repurchase the warrants Treasury holds in their firms at fair market value," meaning the taxpayer won't reap potentially huge profits from this deal. Though the banks ready to repay have given Treasury dividends of around $1.8 billion since November. Plus $2.7 billion from other banks that won't be paying back yet.

Where's the money going? "Under the Emergency Economic Stabilization Act, proceeds from repayment will be applied to Treasury's general account. These repayments help to reduce Treasury's borrowing and national debt.   The repayments also increase Treasury's cushion to respond to any future financial instability that might otherwise jeopardize economic recovery."