TROUBLED ASSET RELIEF PROGRAM - TARP

Program created and managed by the US Treasury Department to stabilize the country’s financial system, revive economic growth, and prevent foreclosures in the light of the 2008 financial crisis by acquiring troubled firms’ assets and equity. Initially, the program gave the Treasury purchasing power worth $700 billion to purchase illiquid mortgage-backed securities and other assets from major institutions in order to restore liquidity to the money markets. TARP was conceived through the Emergency Economic Stabilization Act in 2008. The Dodd-Frank Act cut down the purchasing power to $475 billion.

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