Troubled Asset Relief Program

The Troubled Asset Relief Program (TARP ) is a program in which the United States government buys shares in financial institutions to stabilize the financial sector. The law, signed for U.S. President George W. Bush on 3 October 2008. It is the largest of the measures that the U.S. government had taken in 2008 to address the subprime crisis.

Originally, it was feared that the government would have its shares in companies like GM, AIG and Citigroup last for many years; in fact, these companies have bought back their shares from the U.S. Treasury and are dropped out of the TARP. Of the 245 billion U.S. $ for U.S. banks more than 169 billion U.S. $ have already been paid back, including U.S. $ 13.7 billion in dividends, interest and other income. In March 2010, GM paid more than $ 2 billion to the governments of the U.S. and Canada back, and on April 21, GM had the entire government loans with interest repaid complete, total of U.S. $ 8.1 billion. Also its shares in Citigroup, the U.S. government could separate a profit.

While had originally feared, the program will cost the U.S. government U.S. $ 356 billion, estimates an estimate of 5 October 2010, the net cost to around U.S. $ 30 billion, which expected dividends from the AIG shares already are included. This sum would be significantly lower than the cost, which had to bear the U.S. taxpayers during the Savings -and -loan crisis in the 1980s: the cost of that crisis during the Reagan / Bush era had amounted to 3.2% of GNP while the WSJ estimates the proportion of the subprime crisis in the GNP to less than 1%.

A similar rescue program, there had been in the 1930s with the Reconstruction Finance Corporation ( RFC).