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The sovereign supervision seems to be on follow in recouping the $414 billion in taxpayer allowance outlayed beneath the Troubled Asset Relief Program, with $120.7 billion right away outstanding. But it turns out that over 130 bailed-out institutions paid back their TARP allowance simply by receiving out loans from nonetheless other supervision program, suggesting that the government--and taxpayers--actually haven’t gotten paid back yet.
A new inform from the Government Accountability Office, flagged by the Roosevelt Institute’s Matt Stoeller, shows that 40 percent of the 341 institutions that have exited TARP’s greatest singular initiative--the $205 billion Capital Purchase Program--simply refinanced their loans by a separate, $30 billion supervision module well known as the Small Business Loan Fund (SBLF below).
(SOURCE: GOVERNMENT ACCOUNTABILITY OFFICE)
The Small Business Loan Fund was segment of legislation that transfered in September 2010; it closed a year later. Some deemed it to be a disappointment for having unsuccessful to scatter many of its funds, so it was an without doubt selection for subordinate TARP banks who still need supervision loans. But similar to the initial TARP, the Small Business Loan Fund--dubbed "TARP 2.0" by its opponents--wasn’t paid for up front, so its best mercantile effect will rely on if and when banks at last pay their loans back.
That’s not to say that the Capital Purchase Program--or TARP itself--has been a failure. Only 4 percent of institutions left the CPP since they went bankrupt. Twenty-eight more institutions left by refinancing by other segment of TARP, Community Development Financial Institutions , that aims to run in underserved markets. And the Congressional Budget Office still expects the best cost of the bailout to be $34 billion, that is a fragment of what similar interventions cost elsewhere, as Deborah Solomon explains .
And the 137 financial institutions that hopped from TARP to the Small Business Loan Fund could really well make great on the supervision loans they’re still borrowing. They only haven’t completed so yet.
Update:
Treasury orator Matt Anderson e-mailed me to indicate out that the law developing the Small Business Lending Fund "specifically compulsory that banks who experience in TARP could experience in SBLF," adding that the banks capitalized by the account moreover have "the same inducement to enlarge their lending to tiny businesses beneath the program." This doesn’t change the fact that TARP is being repaid with other open funds, even though it does uncover that the supervision was well ready to give swap ways for firms to exit TARP.