What does TARP mean?
TARP is an acronym for the Troubled Asset Relief Program of the US government to buy assets and equity from financial institutions in order to strengthen its financial sector. It is the largest component of the government’s measures in 2008 to address the subprime mortgage crisis.
What’s the significance?
The effects of the TARP have been widely debated. Some of the questions that have arisen include: Are such funds viewed as windfall by banks? Do they result in changes in lending practices? Government officials overseeing the bailout have acknowledged difficulties in tracking the money and in measuring the bailout’s effectiveness. In March, 2009, it was revealed that at least 13 companies who have received some of the $300 billion in TARP funds owe hundreds of millions of dollars in back taxes.
Who’s talking about it?
Rep. John Lewis (D-Ga), chairman of the House Ways and Means Subcommittee on Oversight, calls the delinquent taxes “shameful”…Financial blogger Hale Stewart sees the TARP plan as flawed due the number of politically motivated bailouts…On Portfolio.com, Felix Salman criticizes the Treasury not only for overpaying for bad assets, but doing so without transparency…The TARP oversight panel, one of whose members is Elizabeth Warren, has come out with some scathing reports about the failed programs and misused funds…Mike Konczal makes the argument that Warren’s fight for the consumer in her position on the TARP oversight committee makes her the ideal candidate to head the CFPB…Bill Black points out that indictment of Wall Street bankers in the crisis was over a TARP repayment, not over subprime lending practices…Bryce Covert notes that the Congressional Oversight Panel in charge of overseeing TARP has had a few successes in limiting bloated compensation, but they’re limited.