WASHINGTON — Ten of the nation's largest banks were given the green light Tuesday to repay $68 billion in government bailout money, freeing them from restrictions on executive compensation that they say are making it hard to keep their top-performing executives.

The Treasury Department said the banks had been approved to repay the money they received from the Troubled Asset Relief Program created by Congress in October at the height of the financial crisis.

Experts say allowing 10 banks to return $68 billion in bailout money shows some stability has returned to the system but caution that the crisis isn't over. And some fear the repayments could widen the gap between healthy and weak banks.

All eight banks that took TARP money and last month passed government "stress tests" confirmed they received permission to repay the bailout funds. They are: JPMorgan Chase & Co., American Express Co., Goldman Sachs Group Inc., U.S. Bancorp, Capital One Financial Corp., Bank of New York Mellon Corp., State Street Corp. and BB&T Corp.

Morgan Stanley did not pass the government test, but on Tuesday said it had raised enough capital quickly and was approved to repay its TARP money.

Northern Trust Corp. was not among the 19 banks subjected to stress tests, but the company said it also had received permission to repay the bailout funds.

President Barack Obama welcomed the news but said "this is not a sign that our troubles are over. Far from it."

Some analysts questioned whether the repayment of TARP money obscures dangers in the broader banking industry. Smaller banks are still saddled with billions of dollars in risky commercial real estate loans. And large banks continue to hold the toxic mortgage-backed assets at the heart of the financial crisis.

More than 600 banks have received nearly $200 billion in TARP money, and 22 smaller banks already have repaid their funds, including the owner of Columbia-based S.C. Bank & Trust.

The 10 banks are set to return money from a $200 billion program the government created as part of the $700 billion financial rescue package. The money initially was used to buy preferred shares in the banks, which are investments that pay regular dividends.

Officials insisted the money was an investment in the companies. The government would receive dividends and warrants, which allow it to buy shares of the banks at a set price over the next 10 years.

Critics have fretted that taxpayers may never see much of the money. But Tuesday's news makes clear that at least for this program, repayments could yield some profits for taxpayers.

Bank analyst Bert Ely called the repayments a positive sign for the banking sector but not a reason to celebrate. He noted that three of the nation's biggest banks — Citigroup Inc., Wells Fargo & Co. and Bank of America Corp. — are still tied to the bailout.

Even the banks permitted to repay the bailout funds are still dependent on government support, including debt guarantees from the Federal Deposit Insurance Corp. and credit lines from the Federal Reserve.

Other observers worried the repayments are a better deal for the banks than they are for the taxpayer.

"We all know why the senior executives want to repay this money: It's a burden to manage the TARP politics," said Mark Williams, a finance professor at Boston University and former Fed examiner.

Williams argued it would be best for the banks to keep as much capital as possible until the economy turns around. Unemployment continues to rise, he said, and that could mean more losses on loans and new bank failures.

"We're not at the bottom of the banking crisis, so why is it, then, that the regulators are letting these banks reduce their capital cushion?" Williams said. "Should they stumble again, taxpayers will have to come to rescue."

Banks have been chafing under limits on executive compensation and say key employees have been leaving for small private firms and foreign banks.

The administration is expected to roll out new executive compensation rules Wednesday that would apply to banks that still have TARP funds.

When Treasury first doled out the money, it received warrants from the banks allowing it to buy stock at a fixed price at some future date. The stock prices are expected to rise as the economy recovers. As a result, the warrants could provide substantial profits for taxpayers.

The firms now have the right to purchase the warrants Treasury holds in their firm "at fair market value," Treasury said Tuesday.

Besides Treasury's potential income from the sale of the warrants, the 10 banks already have paid dividends on the preferred stock totaling about $1.8 billion over the last seven months.

Dividend payments received for all TARP participants are about $4.5 billion to date, according to Treasury.