Cost of TARP drops to $50bn, US government claims

4 October 2010

The cost of the Troubled Asset Relief Program (TARP), the initiative set up to help ailing banks during the global credit crisis, has fallen to less than $50 billion.

President George Bush’s administration initially introduced the fund at a cost of $700 billion to prop up financial firms affected by the fall out from the subprime mortgage crisis.

The government has now revealed that after the assets are sold, the total cost of TARP should be lower than $50 billion.

Timothy Geithner, US Treasury Secretary, who was quoted by Reuters, said: “The people who voted for that - Republicans and Democrats - deserve a lot of credit because that was a deeply difficult political decision for them ... and the returns on that program have been overwhelmingly positive for the economy and for the American people.”

The fund faced criticism from many when it was first launched as it was viewed as funding those responsible for creating the economic crisis.

According to news reports, some candidates running in the forthcoming mid-term November elections are pursuing a line of ‘no more bail outs’ as a way of attracting votes.

TARP expired on October 3rd.

By Jim Ottewill

Become a bobsguide member to access the following

1. Unrestricted access to bobsguide
2. Send a proposal request
3. Insights delivered daily to your inbox
4. Career development