New York (CNNMoney) – It's been a pretty good week for the Treasury Department's bailout program.
Chrysler repaid a $5.9 billion high-interest loan, and Treasury is lowering its ownership stake in bailed-out insurer AIG through a stock sale that will bring in $8.7 billion.FULL STORY
WASHINGTON (CNN) - The controversial bank bailout program may have saved some financial institutions from crumbling, but a Treasury official said the rescue plan was actually “unfortunate.”
Speaking to a small group of reporters, Timothy Massad, Treasury Acting Assistant Secretary for Financial Stability said “it’s never fair to have to use taxpayer dollars to rescue any institution.”FULL STORY
NEW YORK (CNNMoney) - Neil Barofsky, the Special Inspector General of the Troubled Asset Relief Program, informed President Obama on Monday that he is resigning from his position, effective March 30.
"I believe that it is the right time for me to step down and pursue other opportunities," Barofsky wrote in his resignation letter.FULL STORY
(CNN) – The incoming House Oversight and Government Reform chairman on Sunday tried to clarify his recent remarks to Rush Limbaugh where he called President Obama "one of the most corrupt presidents in modern times."
Rep. Darrell Issa said he meant to say the Obama administration instead of the president.
New York (CNNMoney.com) - Government prosecutors got their first conviction of a person accused of defrauding the Troubled Asset Relief Fund Friday.
Charles Antonucci, the former president of the Park Avenue Bank, pleaded guilty in federal court to defrauding the TARP fund, securities fraud, self-dealing, bank bribery and the embezzlement of bank funds.
The perception that a $700 billion bailout aided financial institutions more than consumers could make it harder to do something similar in another crisis, a government watchdog group said Thursday. (PHOTO CREDIT: Getty Images/File)
New York (CNNMoney.com) - The perception that a $700 billion bailout aided financial institutions more than consumers could make it harder to do something similar in another crisis, a government watchdog group said Thursday.
"The program is now widely perceived as bailing out Wall Street banks and domestic auto manufacturers while doing little for the 14.9 million workers who are unemployed, the 11 million homeowners who are underwater on their mortgages, or the countless other families struggling to make ends meet," the Congressional Oversight Panel said in its report.
The report said the Troubled Asset Relief Program (TARP), approved by Congress in 2008 at the height of the financial crisis, succeeded in stabilizing the financial system.
But it said the program's other goals, protecting the homes and savings of Americans, were not met. Since October 2008, more than 7 million people have received foreclosure notices, and home prices and stock values have dropped roughly 30% from their pre-crisis peaks, the report said.
New York (CNNMoney.com) - As mom-and-pop businesses struggle to make ends meet, the latest attempt to help them has gotten mired in Washington politics.
The debate began in October, when President Obama started pushing ways to get cheap capital to small businesses. It continued after his State of the Union address, in which he touted the proposal.
But that didn't go anywhere because of stiff congressional opposition to using money from the TARP bank bailout fund.
Now nearly two months after the administration proposed a new multibillion dollar package of loans and tax credits - with its ties to TARP stripped out - the effort to help small businesses has hit a wall.
New York (CNNMoney.com) - Treasury Secretary Tim Geithner defended the government's bailout of the financial system on Tuesday, saying it has been a "critical" part of the economic recovery and will ultimately cost less than expected.
Geithner is testifying before the Congressional Oversight Panel, the main watchdog for the Troubled Asset Relief Program, or TARP. The government enacted TARP in 2008 at the height of the financial crisis. The program is due to expire in October.
While the economy remains challenged, Geithner said TARP and other "extraordinary actions" taken to combat the financial meltdown "have helped stabilize the financial system and restore economic growth."
Geithner acknowledged that some of the government's efforts were "unpopular." The program, initially funded at $700 billion, was used to pour billions of tax dollars in to troubled Wall Street banks, insurance giant American International Group and the auto industry.
But he argued that such steps were "essential" to contain the crisis and that they have improved conditions for homeowners, consumers, businesses, and state and local governments.
New York (CNNMoney.com) - The federal government could have pressed the private sector to help rescue AIG when the company was on the verge of collapse in September 2008, a government watchdog has found. Instead, it let Wall Street off easy.
The government's $182 billion bailout of the global insurer has left taxpayers holding the bag, while ensuring that all of AIG's creditors and business partners are paid in full, said a Congressional Oversight Panel report released Thursday.
The oversight panel, which is charged with monitoring the government's use of Troubled Asset Relief Program funds, criticized the Federal Reserve and Treasury Department for repeatedly saying they had to choose between letting the world's largest insurer fail or
The government chose not to push major lenders to privately bail out AIG or propose a rescue that combined public and private funds. Nor did it require AIG to negotiate with its business partners, or counterparties, as a condition of its rescue. Since AIG's counterparties emerged unscathed, sophisticated investors who participate in the risky derivatives market now think that taxpayers will come to their rescue as well, the report said.
"The government distorted the marketplace by transforming highly risky derivative bets into fully guaranteed transactions, with the American taxpayer standing as guarantor," the panel wrote.
New York (CNNMoney.com) – The Federal Reserve banks that form the backbone of the nation's financial system transferred an extra-large payload to the U.S. Treasury last year, as they reaped interest from Wall Street bailouts.
The 12 Federal Reserve banks reported that their 2009 income totaled $53.4 billion, a jump of $17.9 billion, or one-third, from the year before.
The board of governors of the Federal Reserve system attributed this increase to a surge in the holding of mortgage-backed securities to prop up the devastated housing market.
The banks said they transferred most of this money, $47.4 billion, to the U.S. Treasury in 2009, an increase of 50%, or $15.7 billion, from the amount they transferred in 2008.