Troubled Asset Relief Program | TRD Research




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Troubled Asset Relief Program

Troubled Asset Relief Program (TARP) was a U.S. government emergency program to address the subprime mortgage crisis. TARP enabled the government to use taxpayer money to purchase various financial securities from financial institutions to prevent a collapse of the global banking industry. President George W. Bush signed it into law in October 2008 and the program ended operations in 2014. Based on TARP, the Treasury Department spent hundreds of billions of dollars buying illiquid, difficult-to-value assets from banks and other financial institutions. The goal of the program was to encourage banks to resume lending to other banks, consumers, and businesses. In view of the faster pace of the recovery of the U.S. economy compared to Europes, TARP has been judged a success. However, TARP was also perceived as unfair, a bailout of the Wall Street firms that had precipitated the subprime mortgage crisis in the first place and that ignored the plight of individual homeowners and Main Street. -MK