Troubled Asset Relief Program
What is the Troubled Asset Relief Program?
It was a bank bailout initiative by the US government to stabilise the American economy in the wake of the financial crisis of 2008. The Troubled Asset Relief Program (TARP) bought toxic assets from failing banks to tackle the sub-prime mortgage crisis.
Where have you heard about the Troubled Asset Relief Program?
The year 2008 will go down in history as one of the biggest ever economic disasters. Global credit markets went into meltdown as several major financial institutions including Fannie Mae and Freddie Mac suffered severe financial problems, and Lehman Brothers went bankrupt.
What you need to know about the Troubled Asset Relief Program.
TARP was signed into law by then president George W Bush on October 3, 2008. It gave the government authorisation to pump billions of dollars into buying up defective mortgage-backed securities. It was hoped that by purchasing these troubled assets, the government could provide the US with some much-needed financial stability and reboot the market with a steady flow of credit.
The government says TARP, which expired in October 2010, prevented the American motor industry from collapse and saved millions of jobs.