The Treasury Department announced today that the Troubled Asset Relief Program, commonly known as TARP, has turned a profit for taxpayers.
TARP was originally introduced at the height of the economic crisis to stabilize banks and financial institutions that were at risk of collapse. It was part of a number of emergency measures, all designed to prevent a financial panic and stave off a second Great Depression.
Today, three financial institutions—Sun Trust Banks, Inc.; KeyCorp; Financial Institutions, Inc.—repaid a combined total of $7.4 billion to the Treasury Department.
Announcing the news, Treasury Secretary, Timothy Geithner said:
While our overriding objective with TARP was to break the back of the financial crisis and save American jobs, the fact that our investment in banks has also delivered a significant profit for tax payers is a welcome development. We still have more work to do repairing the damage caused by the crisis and strengthening the recovery, but today is an important milestone in our efforts to recover taxpayer dollars as we continue winding down TARP.
A new study from the Treasury Department estimates that the full set of measures put in place during the financial crisis—TARP, support for Fannie Mae and Freddie Mac, and other critical initiatives—will produce a combined profit of approximately $24 billion for taxpayers.