Geithner Gives TARP an Extension

Posted on Dec 9, 2009

Wikimedia Commons / Presidencia de la Nación Argentina

The Troubled Asset Relief Program, otherwise known as TARP, was scheduled to expire at the end of this year, but Treasury Secretary Timothy Geithner told Congress on Wednesday that it’ll stick around until October 2010, partly as a precautionary measure in case of economic emergency and partly to help struggling homeowners, banks and small businesses.  —KA

The New York Times:

As Mr. Geithner outlined, Treasury has already all but shut down the parts of TARP that the public most associates with the financial bailout — one to guarantee money market funds, and the Capital Purchase Program to invest in troubled banks.

The money market fund, he reported, generated $1.2 billion in fees after guaranteeing more than $3 trillion in assets. The bank program loaned about $245 billion, $7 billion of that since the Obama administration took office. By the end of 2010, Treasury expects $175 billion to be repaid, with interest. It also is earning returns on the sale of bank warrants held as collateral.

Treasury officials have said that ultimately they expect taxpayers to lose no more than $140 billion — $200 billion less than estimated in August. Most losses will be from payments for averting foreclosures and for bailing out the insurance giant American International Group.

In 2010, Mr. Geithner said, TARP will focus on efforts that were not part of its original mission: a home-loan modification program, an initiative providing capital to small banks and the latest plans, which Mr. Obama highlighted in his economic speech, to get loans to small businesses.

Read more

More Below the Ad

New and Improved Comments

If you have trouble leaving a comment, review this help page. Still having problems? Let us know. If you find yourself moderated, take a moment to review our comment policy.