Tarp

TARP CASE REVIEW1

TARP

(Troubled Asset Relied Program)

Lisa Snyder

BUOL 537 Business Law and the Legal Environment

December 13, 2013

University of the Cumberlands

TARP CASE REVIEW2

1. Purpose, objectives or goal of the TARP program?

TARP allowed the United States Department of the Treasury to purchase or insure up to $700 billion of "troubled assets”. These troubled assets were: residential or commercial mortgages and any securities, obligations, or other instruments that are related to such mortgages, that in each case was originated or issued on or before March 14, 2008, the purchase of which the Secretary determines promotes financial market stability; and any other financial instrument that the Secretary, after consultation with the Chairman of the Board of Governors of the Federal Reserve System, determines the purchase of which is necessary to promote financial market stability, but only upon transmittal of such determination, in writing, to the appropriate committees of Congress." 1 “Cbo.gov. 2009-01-16. Retrieved 2013-11-04”.

Several programs were established under TARP by the treasury to help stabilize the U.S. financial system, restart economic growth, and prevent avoidable foreclosures.

Approximately $250 billion was committed in programs to stabilize banking institutions during the financial crisis.

TARP CASE REVIEW 3

Approximately $27 billion was committed through programs to restart credit markets. These secondary credit markets are essential to keeping credit flowing to households and businesses.

Approximately $82 billion was committed to stabilize the U.S. auto industry. By preventing collapse of the American auto industry and saving more than a million American jobs.

Approximately $70 billion was committed to stabilize American International Group (AIG). If the Federal Reserve and Treasury had not taken action to stabilize AIG, its failure during the financial crisis would have...