President Obama struck a cautionary note on June 9 as he announced the administration’s decision to permit 10 banks to repay a combined $68.3 billion in bailout money. “Now, this is not a sign that our troubles are over,” he said. “Far from it.”

If anything, he was not cautionary enough. The payback could be premature, requiring more bailouts later on. Worse, by allowing it now, before reforms are in place to prevent a repeat of the current crisis, the administration is weakening its hand in reining in the banks.

Goldman Sachs, JPMorgan Chase and other banks have been pressing for months to repay the money, to escape the bailout’s pay caps and other constraints. To prove their soundness, they raised fresh capital and issued debt without government guarantees. Eight of the 10 banks were also deemed adequately capitalized under the government’s recent stress tests. Of the other two, Morgan Stanley moved quickly to raise needed additional capital and Northern Trust was not tested because of its relatively small size.

Unfortunately, the picture of renewed health is not without cracks. On the day of the payback announcement, Elizabeth Warren, who leads the Congressional panel that oversees the bailouts, said the government should consider a new round of stress tests that would better account for rising unemployment and projected losses in commercial real estate, both of which could drastically alter the banks’ fortunes.

The health of the banks is overstated in other ways, too. Last year’s direct infusions of capital are only one of many government props currently supporting the banks, like favorable loans from the Federal Reserve, debt guarantees and incentive payments to modify bad mortgages. Indeed, one of the reasons the banks are so hot to repay the initial bailout funds is that other supports - which don’t come with pay restrictions - are available.

Clearly, the way the banks see it, last year’s bailouts meant unwanted public scrutiny and salary restraints, so paying the money back frees them from those burdens. That bodes ill for regulatory reform. The compensation they seek to protect was based in large part on the risky practices that brought the system to the point of collapse. It stands to reason then that if colossal pay and bonuses continue, so will recklessness.

The Obama administration said on June 10 that it will develop compensation standards to discourage excessive risk-taking. But the 10 large banks that are repaying their bailout funds face no mandatory changes to their pay practices. The administration has also promised a broad regulatory reform proposal. It would have been better to release it before springing the banks. As it is, the payback only adds to the steroidal lobbying muscle that the banks have shown in financial matters before the White House and Congress.

Even the recent credit card reform, which the Obama administration pushed on resistant banks, was an apparent trade-off for the administration’s hands-off approach to a larger proposed reform that would have allowed bankruptcy judges to help troubled homeowners.

After Mr. Obama announced the payback, The Times’s Eric Dash reported, Goldman Sachs employees toasted their freedom at a cafe near Wall Street. The risk is great that the repayment is yet another step back to a status quo that served the bankers so well and everyone else so poorly. That’s nothing to cheer.