U.S. to extend TARP program until Oct. 2010 for banks

December 9, 2009 by · Leave a Comment
Filed under: Policy News 

This is good news as long as we see the programs fade.  It is very hard for investors to gauge the real health of the economy with all of the intervention on the behalf of the government.  It is smart that they are retracting the program but keeping it in place just in cause we do see another decline in economic health.  If it does go well and we don’t need the assistance, we should use it to pay down the deficit being that we are generating debt at record levels.

Treasury Secretary Tim Geithner notified Congress Wednesday that he is extending the Troubled Asset Relief Program through Oct. 3, 2010.

“This extension is necessary to assist American families and stabilize financial markets because it will, among other things, enable us to continue to implement programs that address housing markets and the needs of small businesses, and to maintain the capacity to respond to unforeseen threats,” Geithner wrote in a letter to House Speaker Nancy Pelosi and Senate Majority Leader Harry Reid.

The Treasury Department will continue to use TARP funds to mitigate home foreclosures, provide capital to community banks and take additional steps to boost lending to small businesses, Geithner wrote. The department also may increase its commitment to efforts to improve the secondary markets for consumer loans, small business loans and commercial mortgages.

Beyond these programs, the department will not use any remaining TARP funds “unless necessary to respond to an immediate and substantial threat to the economy stemming from financial instability,” Geithner wrote. “As a nation we must maintain capacity to respond to such a threat. Banks are still experiencing significant new credit losses, and the pace of bank failures, which tend to lag economic cycles, remains elevated.”

Source: Ohio Business Journal

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