Troubled Asset Relief Reform

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“At the heart of every crisis is a political problem—powerful people, and the firms they control, have gotten out of hand.” The United States, in addition to the rest of the world, had been experiencing a deep recession. Congress, towards the end of the Bush administration, passed the Troubled Asset Relief Program (TARP), which is contrary to the belief of many Americans who thought it was President Obama who signed it into law.

“Confidence in the financial system was vanishing. Panic was spreading.” Major financial institutions were failing, thousands were losing their jobs, and many markets that were providing various financial services for citizens had ceased operations. Since the nation had survived the Great Depression, the current …show more content…
However, as much as it affected the economy by saving it from collapse, it came with a cost of over $400 billion. Since the inception and implementation of TARP, many wondered if the plan would actually work. President Bush said, “It’s going to take awhile to restore confidence in the financial system.” James J. Angel, of Georgetown University said that we, as Americans, were all in it together and that each part of the financial system is dependent on the other, in order for it to work. In other words, a weakness in one area will eventually affect …show more content…
What this did was created councils of financial regulators with the intent of monitoring financial businesses. If there were any warning of conditions that led to the collapse prior to TARP, these councils were to assist in heading off a crisis. Large banks that became too large to manage themselves, under this law, could be seized and broken up to make it easier for funds to be recouped. A new office was created within the Department of Treasury, the Federal Insurance Office (FIO), which was to provide better monitoring of the insurance industry. Audits were ordered of the Federal Reserve, consumer protection finance bureaus were created, and lenders were required to become more vigilant in determining whether a consumer could actually make a mortgage payment before a loan was issued. Nevertheless, were these new regulations effective in working towards financial reform and was TARP
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