The announcement came as lawmakers urged the Obama administration to ensure taxpayers get a sufficient return on the warrants the government owns as part of its preferred stock investments in banks.

Goldman Sachs said it believes the price it paid for the warrants, as determined by the Treasury, was fair.

Goldman already paid US$318 million in preferred dividends on the US$10 billion in TARP funds it received, which it repaid in full last month.

Combined with the warrant repurchases, Goldman has paid the government US$1.42 billion, for an annualised return of 23 per cent.

"Taxpayers have gotten a good return on their investment," the Treasury said in a statement.

"The process we designed on valuation worked to protect taxpayers."

Received warrants

In return for doling out hundreds of billions of dollars to banks last fall at the height of the credit crisis, the government received warrants that would have enabled it to buy shares of the banks at a set price in 10 years.

Some argue that by letting the banks pay back the warrants now, taxpayers potentially lose out on money if the price of the bank's stock appreciates over the years,as expected.

Herb Allison, the Treasury official overseeing TARP, said Wednesday that the Obama administration wants to sell the warrants quickly, rather than hold on to them, in order to end its involvement in the financial sector as soon as possible.

Plus, the Treasury doesn't want to speculate whether the warrants will become more valuable in the future, he said during a congressional committee hearing examining whether taxpayers are getting an adequate return on the warrants.

"We are not in the business of ... market timing," he told the panel.

The Treasury announced in June that it would value the warrants through negotiation with the banks.

The agency's offers reflect financial modelling and surveys of market participants.

If the two sides can't agree on a price, the banks can elect to have the Treasury auction the warrants.

Earlier this month, a bipartisan congressional watchdog claimed the Treasury was selling the warrants for one-third less than they're worth, potentially shorting taxpayers up to US$2.7 billion.

But some banks, including JPMorgan Chase and Company, elected to have the warrants sold at auction. Treasury said this was an indication it was driving a hard bargain, asking more than the banks were willing to pay.

Treasury has faced mounting accusations that its relationships with big banks are too cozy. After months of multibillion dollar bailouts, the banks are reporting strong profits while the economy remains weak.

Elizabeth Warren, chairwoman of the congressional oversight panel that calculated Treasury didn't get a good deal on its earlier sales, said the price Goldman Sachs paid was a fair one.

"I think that means oversight works," she said.

Allison said during the hearing that it is impossible to know whether the government would have gotten a better deal by auctioning Goldman's warrants.

That's because it's difficult to determine how the market would value them, he said.