Treasury Begins TARP Wind-Down

"We believe that we've had enough progress in helping bring stability to the financial system, bring down the cost of credit, make sure the capital markets are opening up, businesses can borrow again, raise capital, that we can wind down the principal programs that were designed to make sure that large banks had access to capital (and) were stable," Treasury Secretary Timothy Geithner told Reuters news service, referring to the Troubled Asset Relief Program.

As BailoutSleuth has reported, bailout activity has slowed down considerably since the program first opened at the height of last year's financial crisis. At the time, providing liquidity to stable banks was its prime purpose. As the economy has recovered, however, fewer banks are interested in accepting the regulatory restrictions that come with bailout funding.

So far in October, only two banks have received TARP assistance, and none in the last two weeks.

The TARP initiatives targeted for reduction or elimination include the Treasury Department's effort to remove toxic assets from bank balance sheets and to keep consumer credit flowing by helping to securitize loans.

The decision to allow major elements of the bailout program to expire frees up time and money to assist homeowners and small businesses, government officials told the Associated Press.