WASHINGTON, (Reuters) – JPMorgan, Goldman Sachs and  eight other top U.S. banks won clearance yesterday to repay  $68 billion in taxpayer money given to them during the credit  crisis, a step that may help them escape government curbs on  executive pay.

Many banks had chafed at restrictions on pay that  accompanied the capital injections. The U.S. Treasury  Department’s announcement that some will be permitted to repay  funds from the Troubled Asset Relief Program, or TARP, begins  to separate the stronger banks from weaker ones as the  financial sector heals.

Treasury didn’t name the banks, but all quickly stepped  forward to say they were cleared to return money the government  had pumped into them to try to ensure the banking system was  well capitalized

Stock prices gained initially after the Treasury  announcement but later shed most of the gains on concern the  money could be better used for lending to boost the economy  rather than paying it back to Treasury.

“If they were more concerned about the public, they would  keep the cash and start loaning out money,” said Carl  Birkelbach, chairman and chief executive of Birkelbach  Investment Securities in Chicago.

Treasury Secretary Timothy Geithner told reporters the  repayments were an encouraging sign of financial repair but  said the United States and other key Group of Eight economies  had to stay focused on instituting measures to boost recovery.

Earlier this year U.S. regulators put the 19 largest U.S.  banks through “stress tests” to determine how much capital they  might need to withstand a worsening recession. Ten of those  banks were told to raise more capital, and regulators waited  for their plans to do so before approving any bailout  repayments.

As a condition of being allowed to repay, banks had to show  they could raise money on their own from the private sector  both by selling stock and by issuing debt without the help of  Federal Deposit Insurance Corp guarantees. The Federal Reserve  also had to agree that their capital levels were adequate to  support continued lending.