Financial Sector Policy
Purchase of Citigroup Preferred Stock
Date:
November 23, 2008
Policy Area:
Financial Sector Policy
Economic Target:
Financial Institutions
Action Type:
Equity Purchase
Maximum Amount:
$20.00 billion
Deficit Impact:
-$1.70 billion In November of 2008, the Department of Treasury purchased $20 billion in preferred stock from Citigroup under the "Targeted Investment Program" of TARP.
Source:
Notes:
Amount spent indicates equities purchased as of 2/1/2010 ( http://www.financialstability.gov/docs/transaction-reports/transaction_report_04-20-2009.pdf ).
Deficit impact is derived from CBO's subsidy rate for the investment in Citigroup under the Targeted Investment Program, as detailed in CBO's January 2010 baseline.
Treasury Guarantee of Citigroup Assets
Date:
November 23, 2008
Policy Area:
Financial Sector Policy
Economic Target:
Financial Institutions
Action Type:
Government Guarantee
Maximum Amount:
$5.00 billion Part of a government guarantee of $301 billion in Citigroup assets by multiple entities (Treasury, FDIC, Federal Reserve). After Citigroup absorbs the first $29 billion in losses, the remaining losses are split 90:10 between the government and Citigroup, with the first $5 billion absorbed by the Treasury with TARP funds, the next $10 billion paid by the FDIC, and remaining losses covered by the Federal Reserve with a non-recourse loan.
On December 23, 2009, Citigroup terminated the asset guarantee agreement.
Notes:
Amount spent current as of 1/4/2010 (http://www.financialstability.gov/docs/transaction-reports/transaction_report_04-20-2009.pdf).
Deficit impact is derived from CBO's calculated subsidy rate for Citigroup's guaranteed assets (0%), as detailed in the CBO's January 2010 baseline.
Credit Protection For Fed TALF Loan Programs
Date:
November 25, 2008
Policy Area:
Financial Sector Policy
Economic Target:
Financial Institutions
Action Type:
Government Guarantee
Maximum Amount:
$30.00 billion
Amount Spent:
$4.30 billion
Deficit Impact:
$0.22 billion Originally up to $100 billion of credit protection from the Treasury's Troubled Asset Relief Program to the Federal Reserve for its Term Asset Backed Securities Loan Facility, which provides up to $1 trillion in liquidity to financial institutions that provide small business loans and consumer lending such as auto loans, student loans and credit cards.
Notes:
Maximum amount indicates maximum as reported by the Special Inspector General for TARP in the quarterly report to Congress in January 2010 (http://www.sigtarp.gov/reports/congress/2010/January2010_Quarterly_Report_to_Congress.pdf). However, the report noted that this number may be subject to change if TALF reaches $200 billion. Amount spent as of 7/23/2010 (http://www.financialstability.gov/latest/index.html).
Deficit impact is derived from CBO's subsidy rate for the $4.3 billion in currently committed funds for the Term Asset-Backed Securities Loan Facility (5%), as listed in CBO's January 2010 baseline.
Treasury Guarantee of Bank of America Assets
Date:
January 16, 2009
Policy Area:
Financial Sector Policy
Economic Target:
Financial Institutions
Action Type:
Government Guarantee
Maximum Amount:
$7.50 billion
Deficit Impact:
-$2.50 billion Part of multi-agency government guarantee of approximately $118 billion in Bank of America assets, most of which it acquired through the purchase of investment bank Merrill Lynch. Under the terms of the agreement, Bank of America is responsible for the first $10 billion in losses on the assets. Remaining losses are divided 90/10 between the government and Bank of America. For the next $10 billion in losses, the Treasury (through the Troubled Asset Relief Program) and FDIC split the government’s 90% share with the Treasury coveri
Notes:
Maximum amount figure represents Treasury's share of total assets under guarantee. Deficit impact based on amount spent.
Deficit impact is derived from CBO's estimated subsidy cost for the Treasury (TARP-funded) portion of the Bank of America asset guarantees (-$1 billion), as listed in CBO's January 2010 baseline.
Purchase of Bank of America Preferred Stock
Date:
January 16, 2009
Policy Area:
Financial Sector Policy
Economic Target:
Financial Institutions
Action Type:
Equity Purchase
Maximum Amount:
$20.00 billion
Deficit Impact:
-$1.30 billion In January of 2009, the Department of Treasury purchased $20 billion in preferred stock from Bank of America under the "Targeted Investment Program" of TARP.
This purchase was on top of an initial $25 billion investment through the Capital Purchase Program, and followed by a multi-agency government guarantee of approximately $118 billion of its assets offered through the Department of Treasury, FDIC, and Federal Reserve.
Source:
Notes:
Amount spent indicates investment made as of 4/10/2010 (http://www.ustreas.gov/initiatives/eesa/transactions.shtml). Budgetary impact calculated by CRFB using CBO's practice of estimating costs on a risk-adjusted present value basis.
Deficit impact is derived from CBO's estimated subsidy cost for the Targeted Investment Program investments in Bank of America and Citigroup, as listed in CBO's January 2010 baseline.
Public-Private Investment Fund
Date:
February 10, 2009
Policy Area:
Financial Sector Policy
Economic Target:
Financial Institutions
Action Type:
Loans
Maximum Amount:
$75.00 billion
Amount Spent:
$22.02 billion
Deficit Impact:
$2.20 billion See the companion FDIC entry for the Public-Private Investment Fund (PPIP) and the Fed entry for PPIP.
Program first announced by Treasury Secretary Geithner on 2/10/2009.
Notes:
Maximum amount is Treasury's contribution from TARP funds. Current amount spent reflects total approved funds for Legacy Securities PPIP as of 8/4/2010 (http://www.financialstability.gov/latest/index.html). Deficit impact calculated from the program's subsidy rate (10%), reported in the CBO's January 2010 basline.
Capital Assistance Program
Date:
February 10, 2009
Policy Area:
Financial Sector Policy
Economic Target:
Financial Institutions
Action Type:
Equity Purchase Program first announced by Treasury Secretary Timothy Geithner on 2/10/2009. When implemented, it will provide capital to banks and bank holding companies that demonstrate a need for further capital to support lending activities and survive further economic downturns. Banks that participate will receive preferred securities that are convertible into common equity if necessary.
Notes:
Maximum amount and deficit impact unknown. Program closed on 11/09/2009.
AIG Equity Capital Facility
Date:
March 2, 2009
Policy Area:
Financial Sector Policy
Economic Target:
AIG
Action Type:
Equity Purchase
Maximum Amount:
$29.84 billion
Amount Spent:
$29.84 billion
Deficit Impact:
$8.10 billion The Treasury will allow AIG to receive up $30 billion dollars in exchange for AIG preferred stock. Actions taken in coordination with a restructuring of the Fed's line of credit to AIG.
Notes:
Maximum amount specified in Treasury term sheet. Amount spent current as of 3/15/2010, as reported in Treasury transaction reports.
Deficit impact is derived from CBO's overall subsidy rate for assistance to AIG (13%), as listed in CBO's January 2010 baseline. However, in its Preliminary Analysis of the President's Budget, the CBO revised its total cost estimate for TARP up by $10 billion, stating that most of the revision comes from an updated estimate of support to AIG. Thus, the subsidy rate for AIG support is now closer to 27%.
