Troubled Assets Relief Program (TARP)

Wall Street Journal  Jan 28  Comment 
A government program to rid itself of TARP investments in small banks has proved a boon to hedge funds, private-equity and other private investors, according to a new watchdog report.
Mondo Visione  Dec 19  Comment 
Thank you everybody for joining us.   I am pleased to announce this morning that Treasury has sold its entire remaining stake in Ally Financial.   With this sale, we are exiting the last major TARP investment and winding down the...
The Economic Times  Dec 19  Comment 
Taxpayers have recovered almost all of their TARP investments, losing money on automakers but turning a profit on the financial sector bailout.
New York Times  Oct 6  Comment 
Including hard terms for A.I.G. was politically necessary to getting the TARP program going, but Henry M. Paulson Jr. said he did support the bailout package and its terms.
MarketWatch  Sep 24  Comment 
Watchdog report criticizes Treasury for allowing pay packages worth at least $1 million a year.
SeekingAlpha  Sep 3  Comment 
By Randall Hsu: The Trouble Asset Relief Program (TARP) was an initiative by the U.S. Treasury to stabilize the 2007-08 crisis. As part of TARP, the U.S. Treasury obtained warrants to purchase equity at a specific price in a future date from...
DailyFinance  Sep 3  Comment 
Intervest Bancshares Corporation (the “Company”) (Nasdaq:IBCA), the holding company for Intervest National Bank, announced today that it has repurchased the warrant that had been issued to the U.S. Department of the...
Benzinga  Aug 14  Comment 
The U.S. Department of the Treasury today announced that it would continue to wind down its investment in Ally Financial (Ally) by selling additional shares of common stock through its first pre-defined written trading plan. Treasury currently...



Read more about the 2008 Financial Crisis.

The Troubled Assets Relief Program (TARP) is a facility created by the US Government to buy distressed assets from financial institutions in response to the 2008 Financial Crisis. The program was created through the Emergency Economic Stabilization Act of 2008 and is managed by the Office of Financial Stability at the US Treasury. The TARP was initially designed to buy distressed mortgage-backed securities from financial institutions but evolved to encompass corporate debt and equity injections into banks.

The Emergency Economic Stabilization Act of 2008, enacted on October 3, 2008, allows the Treasury to spend up to $700 billion on this program. The Treasury is allowed to draw up to $250 billion immediately after the enactment, then requires the President to certify an additional $100 billion; another $350 billion are subject to further Congressional approval.[1]

The original idea behind TARP was to create liquidity in the credit markets by buying (and freeing up) assets tied to mortgages from banks -- hence allowing them to continue lending. However, on October 13, 2008, the Treasury announced that it was going to take equity stakes in nine major banks and encouraged smaller banks to apply for equity injections.

Institutions which participate in this program will be subject to more oversight from the government and would have to limit executive compensation.

On November 12, 2008, Treasury Secretary Henry Paulson announced that no TARP funds would be used to purchase troubled assets.


  1. Economic rescue swiftly signed into law. AFP (2008-10-03).
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