Capital Purchase Program
{{#badges:RealEconomyProject}} The Capital Purchase Program is part of the Troubled Assets Relief Program, created by the Emergency Economic Stabilization Act of 2008. The Treasury loaned and invested billions ($218 billion was authorized) in banks and financial firms to give them enough cash to cover immediate obligations and keep them afloat. No more loans are being made, but many have yet to be repaid.
From the Special Inspector General for the Troubled Asset Relief Program's October 2009 report:
“Under CPP, TARP funds are used to purchase directly preferred stock or subordinated debentures in qualified as financial institutions. Treasury created CPP to provide funds to ‘stabilize and strengthen the U.S. financial system by increasing the capital base of an array of healthy, viable institutions, enabling them [to] lend to consumers and business[es].’ As of September 30, 2009, Treasury had invested $204.6 billion in institutions through CPP.31 This represents 94% of the maximum projected funding total of $218 billion under the program, of which $70.7 billion had been repaid as of September 30, 2009.”[1]
| CAPITAL PURCHASE PROGRAM |
|---|
| Balance Sheet |
| Disbursed*: $204.9 billion[2] |
| Current outstanding: $74.7B[3] |
| Public Funds |
| Maximum at-risk: $218 billion[4] |
| Current at-risk: $74.7B (outstanding)[5] |
* See the methodology and glossary for definitions of "disbursed," etc.
Contents
Funding agency and aid type
The funding agency was the Treasury Department.
The funds were an investment/loan. Cash transfers were made to banks in exchange for preferred stock and other types of corporate debt, some of which bore dividends.
Who benefits
Banks. Injections of funds to keep them afloat.
Notes
The program was closed at the end of December, providing a total of 707 U.S. banks with $204.9B.[6]
One recipient of TARP funds through the CPP, CIT Group, Inc. (CIT), received $2.33 billion in December 2008.[7] CIT eventually filed for bankruptcy on November 2, 2009.[8]
Articles and resources
Related SourceWatch articles
References
- ↑ SIGTARP's report to Congress, Oct. 2009.
- ↑ Accounting released by Treasury on Feb. 5, 2009, “2-5-10 Transactions Report as of 2-3-10 Convenience Copy”. http://www.financialstability.gov/latest/reportsanddocs.html
- ↑ U.S. Treasury Department, Office of Financial Stability - Troubled Asset Relief Program, "Transactions Report For Period Ending March 11, 2010". Updated Treasury reports on TARP are available at: http://www.financialstability.gov/latest/reportsanddocs.html
- ↑ Office of the Special Inspector General for the Troubled Asset Relief Program (SIGTARP), “Quarterly Report to Congress October 21, 2009”, p. 41.
- ↑ U.S. Treasury Department, Office of Financial Stability - Troubled Asset Relief Program, "Transactions Report For Period Ending March 11, 2010". Updated Treasury reports on TARP are available at: http://www.financialstability.gov/latest/reportsanddocs.html
- ↑ Meena Thiruvengadam, "Treasury Ends TARP Bank Investments,", Dec. 31, 2009.
- ↑ Letter from Jeffrey M. Peek, CEO, CIT Group, Inc., to Neil M. Barofsky, SIGTARP, March 6, 2009
- ↑ Tiffany Kary & Dawn McCarty, "CIT Group Files Bankruptcy, Seeks to Reduce Debt," Bloomberg, November 2, 2009.
External resources
External articles
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