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U.S. taxpayers to profit from Troubled Asset Relief Program (TARP)

June 14, 2012 by · Leave a Comment 

There were much criticism about the TARP that was introduced in 2008 and 2009. It was dubbed as a government sponsored bank bailout at the time. A total of $245 billion of tax payer money was pumped into save banks from going under during the worst financial crisis of this generation.

It appears that the U.S. tax payers are benefiting from the TARP after all. So far Uncle Sam has collected $264 billion making a profit of $19 billion for the tax payers. There are over 300 smaller banks that owe the Treasury more than $11 billion. Once they pay back the tax payer profit from the TARP will continue to grow in the near future since the Federal government intends to exit the program soon.

Big banks such as Bank of America and Citibank exited the program earlier in order to get away from the government control. However, it appears that smaller banks are having trouble repaying TARP funds or purposely delaying the repayment due to lower borrowing cost that they are enjoying.

The Treasury is auctioning off the remaining TARP preferred it owns and intend to exit the program within next 12 to 18 months.

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