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  1. Home
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  3. October
  4. 3
  5. Emergency Economic Stabilization Act of 2008

Events on October 3 in history

2008Oct, 3

The Emergency Economic Stabilization Act of 2008 for the U.S. financial system is signed by President George W. Bush.

The Emergency Economic Stabilization Act of 2008, often called the "bank bailout of 2008", was proposed by Treasury Secretary Henry Paulson, passed by the 110th United States Congress, and signed into law by President George W. Bush. The act became law as part of Public Law 110-343 on October 3, 2008, in the midst of the financial crisis of 2007–2008. The law created the $700 billion Troubled Asset Relief Program (TARP) to purchase toxic assets from banks. The funds for purchase of distressed assets were mostly redirected to inject capital into banks and other financial institutions while the Treasury continued to examine the usefulness of targeted asset purchases.A financial crisis had developed throughout 2007 and 2008 partly due to a subprime mortgage crisis, causing the failure or near-failure of major financial institutions like Lehman Brothers and American International Group. Seeking to prevent the collapse of the financial system, Secretary of the Treasury Paulson called for the U.S. government to purchase several hundred billion dollars in distressed assets from financial institutions. Paulson's proposal was initially rejected by Congress, but the ongoing financial crisis and the lobbying of President Bush ultimately convinced Congress to enact Paulson's proposal as part of Public Law 110-343.

Early estimates for the total cost of the bailout to the government were as much as $700 billion, however TARP recovered funds totalling $441.7 billion from $426.4 billion invested, earning a $15.3 billion profit or an annualized rate of return of 0.6% and perhaps a loss when adjusted for inflation.

References

  • Emergency Economic Stabilization Act of 2008
  • George W. Bush

Choose Another Date

Events on 2008

  • 11Jun

    Canadian Indian residential school system

    Canadian Prime Minister Stephen Harper makes a historic official apology to Canada's First Nations in regard to abuses at a Canadian Indian residential school.
  • 7Aug

    South Ossetia

    The start of the Russo-Georgian War over the territory of South Ossetia.
  • 29Sep

    Dow Jones Industrial Average

    Following the bankruptcies of Lehman Brothers and Washington Mutual, The Dow Jones Industrial Average falls 777.68 points, the largest single-day point loss in its history.
  • 29Oct

    Northwest Airlines

    Delta Air Lines merges with Northwest Airlines, creating the world's largest airline and reducing the number of US legacy carriers to five.
  • 10Nov

    Phoenix (spacecraft)

    Over five months after landing on Mars, NASA declares the Phoenix mission concluded after communications with the lander were lost.

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