Business

US bail-out official steps down

US Treasury building
Image caption The Treasury's Tarp programme was not without its critics

The US Treasury Department official in charge of overseeing the government's Troubled Asset Relief Program (Tarp) is stepping down.

Herb Allison said that he was resigning now that the US bail-out programme was winding down.

He revealed his plans in an e-mail to colleagues that the Treasury Department has made available.

On Tuesday, President Obama's top economics adviser, Larry Summers, announced his resignation.

Critics

Tarp was proposed by then-US Treasury Secretary Henry Paulson in October 2008.

It was a programme that saw the US spend more than $700bn to purchase distressed assets, especially mortgage-backed securities, and make capital injections into banks.

The goal was to stabilise financial institutions and to encourage banks to resume lending again at levels seen before the financial crisis.

Much of the money funnelled to banks has now been repaid.

Although still going, from next month Tarp will not be able to commit funds to new projects.

Treasury secretary Timothy Geithner said he wanted to "praise and celebrate" the work done by those running the Tarp programme.

"While we have succeeded in putting out the financial fires that caused this deep economic crisis, we have not yet repaired all the damage," he added.

The scheme has, however, had its critics, with many questioning the government rescue of big banks while unemployment was climbing and thousands of Americans were having their homes repossessed.

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