The Troubled Asset Relief Program, or T.A.R.P., was created in 2008 by the passage of the Emergency Economic Stabilization Act. It was introduced to Congress in the midst of the 2008 financial crisis in the United States, which left large banks on Wall Street either declaring bankruptcy or on the verge of it, while around these banks the financial system of the United States stood unmoving, choked and crippled, brought to its knees and unable to function…
The Need for Relief: Why T.A.R.P. was Created The housing market is generally cited as one of the biggest factors behind the financial crisis that resulted in the need for T.A.R.P. to be created. After a short recession in 2001, housing sales rose, peaking in September of 2005 before dropping by as much as 52% by November 2007 (DiMartino, and Duca 1). In 2001, to counteract a recession, the Federal Reserve proceeded by lowering the interest rate alongside the push from both the Clinton and the Bush administrations for the American public to buy houses (Gjerstad, and Vernon L. Smith). This resulted in the lowering of credit standards, which in turn granted a flood of events such as subprime mortgages, or the lending of money to people generally considered a credit risk, going from 9% in 2001 to 40% in 2006 (DiMartino, and Duca 2). By 2007, the housing market was deteriorating, and delinquency rates on subprime mortgages and the interest-only adjustable rate mortgages were soaring; the big businesses with investors in those subprime mortgages were going under quickly (DiMartino, and Duca 5). The Federal Reserve responded by cutting the interest rate aggressively, from 5.25% to 2%, but the crisis continued (Bernanke). By September 15, 2008, the Treasury Secretary was forced to pay a visit to the White House and tell then-President George W. Bush an awful truth: the financial market was imploding, and unless something was done quickly, the worst economic crisis since the Great Depression would result (Halm-Addo 1). Thus emergency measures were taken, and on October 3, 2008 the government was forced to step in and lend assistance, by means of creating the Troubled Asset Relief Program. The Purpose of The Troubled Asset Relief Program (T.A.R.P.) The purpose of the Troubled Asset Relief Program (T.A.R.P.) was, originally, quite simple. The Emergency Economic Stabilization Act created T.A.R.P. as well as giving the power to the United States Government to both buy and insure certain types of assets, mainly to protect the average taxpayer (“The Emergency Economic Stabilization Act of 2008”). Specifically, T.A.R.P. meant that the Secretary of the Treasury, with the backing and support of the Federal Government, could then purchase defaulted mortgages or other assets that were weighing on the balance sheets of the subprime lenders (“The Emergency Economic Stabilization Act of 2008”). At the time of being enacted into law on October 3, 2008, no lending between banks was taking place, and in turn, no lending to the consumer was taking place (Massad 1). No lending to consumers meant that no money was flowing into the economy of the country, thus creating a nightmare for all businesses and consumers. Allowing the Federal Government to purchase the debt in exchange for repayment terms would wipe the bad debt from the balance sheets of the banks and allow them to begin functioning once more. T.A.R.P. created several programs which were able to kick-start the American economy. Money was invested in banks through several programs, including one known as the Capital Purchase Program (CPP), which aided banks across the nation (United States Department of Treasury). Through the Capital Purchase Program, the United States Treasury, working with the Federal Reserve and other ...
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(The Troubled Asset Relief Program Term Paper Example | Topics and Well Written Essays - 1500 Words)
“The Troubled Asset Relief Program Term Paper Example | Topics and Well Written Essays - 1500 Words”, n.d. https://studentshare.net/finance-accounting/54449-tarp.
2008 Financial Crisis
Until the start of the financial crisis in August 2007, the world was experiencing strong economic growth (Obstfeld & Rogoff). Investors and consumers were optimistic in their expectations, which reflected itself in high consumption and investment rates.
Mental problems are not pertained to particular race, nationality or gender. It silently carries a disgrace causing troubles to the individuals and society. It has been expected that almost half of the criminal arrests can be avoided by considering these mentally ill persons in a proper way rather than putting them into jails.
144). For this reason health care practitioners should be able to satisfy the physical, mental, and social needs of their respective patients as part of rendering therapeutic care. Based on my personal encounter with a patient who went through a surgery for cardiac ablation, the patient was experiencing chronic pain which was unrelieved for 3 days.
Department of Treasury and TARP funds received by the bank. It shall also discuss the balance sheet and the income statement for 2009 and 2010. The performance of the traded stocks of the bank shall also be presented in this financial report.
The nation was losing hundreds of thousands of jobs each month; the stock market was plunging, major banking institutions were failing by the day and the country was dragging the global economy toward a second Great Depression. Treasury Secretary Hank Paulson reportedly marched into President Bush’s office and told him if the financial markets were not stabilized and soon, the President’s legacy would not be the military debacle in Iraq but as the overseer of a global economic depression that would dwarf the one of the 1930’s.
According to the report the ‘use and throw’ consumerism together with modern lifestyle-changes has drastically contributed to the increased disposal of industrial wastes, particularly solid wastes. Hazardous solid wastes raise potential challenges to human race and to the environment as a whole.
ulson reportedly marched into President Bush’s office and told him if the financial markets were not stabilized and soon, the President’s legacy would not be the military debacle in Iraq but as the overseer of a global economic depression that would dwarf the one of the
kruptcy or on the verge of it, while around these banks the financial system of the United States stood unmoving, choked and crippled, brought to its knees and unable to function. In only the second time in history, by the creation of T.A.R.P., the government stepped in to
for these schools to get funds from the merit award program, their districts are required to develop a pay plan based on performance which meets the requirements of the program. Merit award program provides a supplement payment not lower than five percent (5%) and not exceeding