TARP was a critical part of the government's efforts to combat the worst financial crisis since the Great Depression. It included a comprehensive set of measures in five key areas:
TARP helped prevent a collapse of the American auto industry, saving more than a million American jobs. Treasury implemented specific programs under TARP to prevent uncontrolled liquidations in the industry that would have had catastrophic impacts on not only the auto manufacturers but their suppliers, dealers, and the surrounding communities.
Treasury launched five programs under TARP to stabilize America’s banking system and ensure that banks were adequately capitalized. Treasury has already recovered funds in excess of the amount originally invested in banks, and taxpayers are now seeing a positive return on this investment.
Availability of credit is critical for small businesses to grow and for consumers to make home improvements, buy a new car, or send their children to college. Treasury implemented three programs to restart the flow of credit to meet the critical needs of small businesses and consumers.
Treasury took action to reduce the number of foreclosures and help preserve homeownership. The TARP housing programs were not meant to prevent all foreclosures but to focus on helping struggling homeowners keep their homes and reduce the spillover effects of foreclosures on neighborhoods, communities, the financial system, and the economy.
Treasury took action to help prevent the collapse of AIG, the world’s largest conventional insurance provider at the time, because its failure in during the financial crisis would have had a devastating impact on our financial system and economy. The decision was an important factor in helping prevent an economic collapse and further losses of American jobs. Today, Treasury is moving to wind down its stake in AIG and recover the taxpayers’ investment.
Today, because of TARP and other critical measures to combat the fallout from the financial crisis, including the American Reinvestment and Recovery Act and actions taken by the Federal Reserve and Federal Deposit Insurance Corporation, our economy is growing again. Businesses are adding jobs. Private investment is returning. We still have more work ahead to repair the damage caused by the crisis, but the economy is healing and gradually getting stronger.