Treasury: TARP Bank-Bailout Program Returns $23B to Taxpayers

Treasury: TARP Bank-Bailout Program Returns $23B to TaxpayersThe U.S. Treasury (taxpayers) invested a total of $245 billion to bailout banks and other entities at the height of the financial crisis in 2008-09, and has recovered $268 billion through repayments, dividends, and other income, U.S. officials said today.
That represents a $23 billion positive return for taxpayers to date.
“Of course, TARP was always meant to be a temporary, emergency program,” said Timothy G. Massad, Treasury’s Assistant Secretary of Financial Stability. “The government shouldn’t be in the business of owning stakes in private companies for an indefinite period of time. That’s why, after we extinguished the immediate financial fire, we began moving to exit our investments and replace temporary government support with private capital.”
Earlier this year, Treasury outlined its strategy for winding down its remaining TARP (Troubled Asset Relief Program) bank investments through the Capital Purchase Program (CPP).
That strategy encompasses waiting for banks to repay; selling investments; and restructuring investments to facilitate a repayment or sale.
There are 218 banks remaining in TARP’s Capital Purchase Program – down from an original total of 707.
Massad said he expects to conduct auctions for Treasury’s CPP preferred shares or subordinated debt in about two-thirds of the remaining banks next year.
He also expects that the majority of the remaining banks that are not auctioned will repay Treasury’s CPP preferred shares or subordinated debt at par. Treasury will continue to hold onto those investments.
“And when it represents the best deal possible for taxpayers, we’ll also continue to engage in a limited number of restructuring,” he said.

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