Taking Stock: What has the Troubled Asset Relief Program Achieved?

by Elizabeth Warren,  for The Harvard Law School Forum at Harvard Law School, January 2, 2010.

The financial crisis that gripped the United States last fall was unprecedented in type and magnitude. It began with an asset bubble in housing, expanded into the subprime mortgage crisis, escalated into a severe freeze-up of the interbank lending market, and culminated in intervention by the United States and other industrialized countries to rescue their banking systems.

The centerpiece of the federal government’s response to the financial crisis was the Emergency Economic Stabilization Act of 2008 (EESA), which authorized the Treasury Secretary to establish the $700 billion Troubled Asset Relief Program (TARP) and created the Congressional Oversight Panel to oversee the TARP. In a recent report,Taking Stock: What Has the Troubled Asset Relief Program Achieved? (available here), issued at the end of the first full year of TARP’s existence, the Panel is taking stock of the TARP’s progress: reviewing what the TARP has accomplished to date, and exploring where it has fallen short.

Although the TARP was a key element of the federal government’s response to the financial crisis, it was only one part of a multi-pronged approach. The FDIC and the Federal Reserve undertook major initiatives that are also aimed at bolstering financial stability. In addition, Congress enacted a fiscal stimulus measure that was larger than the TARP. Foreign governments also acted to rescue their banking systems, with consequences that echoed through the U.S. system as well…(continue reading)


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