Although it remains an emotional issue for many people, TARP – the Troubled Asset Relief Program enacted during the Bush administration – has actually been exceptionally – and unambiguously — successful. Not only has it been one of the principal reasons the U.S. financial system has continued to be available to provide Americans with the financing they need for business and personal purposes, but the program’s projected cost to taxpayers continues to fall dramatically as institutions buy back the preferred shares of stock that were purchased by the Treasury and paid dividends and interest.
There was more good news along these lines from the Treasury this morning: Six bank holding companies have now repaid an additional $2.7 billion in federal bailout funds they received during the financial crisis.
Overall repayments under TARP are now $234 billion. Including the income from dividends, interest and the sale of other securities, the Treasury said its total intake from TARP is now $269 billion.
Treasury Secretary Timothy Geithner said last week that (as the Financial Services Roundtable has been saying for some time) he expects Treasury to earn a profit on all of its TARP investments except for housing rescue programs. He also said the final cost of Treasury bailouts may be substantially less than the current $25 billion estimate from the Congressional Budget Office, which itself is a reduction from what was previously assumed.