Word: tarp
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Dates: during 2000-2009
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...There wasn't much of a debate" among Bush's top economic advisers about using part of the bailout money to help automakers, says a senior Treasury Department official. Of the first $350 billion released by Congress last month under the emergency bill - called the Troubled Asset Relief Program (TARP) - only $60 billion remains. "Everyone felt the same way: the TARP is for the financial industry," says the senior Treasury official...
...main argument within the Administration against using TARP money for an auto-industry loan is that the automakers' problems are viewed as systemic, not short-term. "No one in this building or in this Administration has a plan for the long-term viability of the auto industry," says the senior Treasury official. "It's just not on the shelf." Without such a plan, the Administration has decided that any short-term loan should come from existing money from Congress for the auto industry's modernization...
...Last Wednesday Paulson pulled what some have called the TARP-and-switch. The Treasury Secretary said he was backing away from using a large portion of the $700 billion Troubled Asset Relief Program fund to buy up troubled mortgage bonds. Instead, Paulson said he was more interested in helping the currently stalled market for financing among other things credit card and auto loans...
...Treasury Department says nothing has been finalized, but reportedly Paulson and his advisers are looking into using TARP funds along with some money from outside investors to buy up credit card, auto loans and other, non-mortgage consumers debt. The financing mechanism for that type of debt, often called securitization, has stalled like much of the rest of the banking sector. Paulson is hoping that buying up debts directly will be a better way of stimulating lending than just purchasing banks' shares and trying to force the firms to extend loans...
...Rodgin Cohen, a top banking lawyer at Sullivan & Cromwell, says being approved for TARP funds is do or die for any bank perceived to have problems. "The consequences are unmistakable, and I don't think we should blink at them," Cohen told the attendees of a banking-industry conference earlier this month. "It is failure within maybe a day, maybe a couple of days. It's hard for me to see how a bank survives if the regulators have said it is not sufficiently viable to be in these [federal assistance] programs...