TARP UPDATE: Troubled Assets Will Not Be Purchased

In remarks delivered by Treasury Secretary Paulson on November 12, 2008 providing an update on, and discussing the deployment of the remaining funds available under the Treasury's Troubled Asset Relief Program ("TARP"), Mr. Paulson indicated that direct asset purchases under the TARP were unlikely as the Treasury had determined that at this time such purchases were not the most effective use of the remaining funds available under the TARP.

CaPP Investments

The TARP, established on October 3, 2008, authorized the Treasury to buy or insure troubled assets from financial institutions. The TARP authority was limited to $700 billion, with $250 billion approved for immediate deployment. On October 14, 2008, the Treasury announced the Capital Purchase Program ("CaPP"), under which the Treasury would purchase up to $250 billion of securities from U.S. financial institutions. By October 26, 2008, $115 billion in preferred securities had been purchased from eight major