Rescue claims questioned

The credibility of the U.S. government’s $700 billion financial rescue program was damaged by claims a year ago that all of the initial banks receiving support were healthy, a new report contends.

The credibility of the U.S. government’s $700 billion financial rescue program was damaged by claims a year ago that all of the initial banks receiving support were healthy, a new report contends.

Special Inspector General Neil Barofsky generally found that the government had acted properly in October 2008 as it scrambled to implement the Troubled Asset Relief Program to avert the collapse of the U.S. financial system.

But the report said that then-Treasury Secretary Henry Paulson and other officials were wrong to contend at an Oct. 14 press conference that all nine institutions receiving the first round of support — $125 billion — were sound.

“These are healthy institutions, and they have taken this step for the good of the economy,” Paulson had declared at the time. Barofsky said that the fact that Citigroup Inc. and Bank of America Corp. soon required billions in additional assistance highlighted the inaccuracy of that claim and raised questions about the whole effort. In addition, Merrill Lynch, which was also in the original nine, was in the process of being acquired by Bank of America because of its financial position. Barofsky serves as the auditor for the Troubled Asset Relief Program, a position that was created by Congress when it passed the $700 billion bailout fund.

Get local stories you won't find anywhere else right to your inbox.
Sign up here

Just Posted

Dashcam captures hair-raising near miss on Highway 2

Paramedic says his emergency driving training kicked in to avoid collision

Updated: Red Deer mourns loss of philanthropist Gary W. Harris

Gary W. Harris Canada Games Centre stands as lasting legacy to businessman’s generosity

Skip The Dishes launches alcohol delivery in 3 Alberta cities

Some Alberta residents can now get their beer and wine delivered through… Continue reading

UPDATE: Road clear following three-vehicle collision near Sylvan Lake

Police say there was a “serious collision” near Sylvan Lake Wednesday afternoon.… Continue reading

Your community calendar

Feb. 19 A Liberation of Holland event is being held at the… Continue reading

David Marsden: Hospital unfairness makes me ill

The provincial government clearly isn’t without money. If it was, it wouldn’t… Continue reading

Pastrnak scores overtime winner, Bruins edge Oilers 2-1

Bruins 2 Oilers 1 (OT) EDMONTON — The Boston Bruins have proven… Continue reading

P.E.I.’s Birt through to championship round at Tournament of Hearts

MOOSE JAW, Sask. — Suzanne Birt reached the championship round at the… Continue reading

Teachers focusing on innovations at Red Deer convention

More than 1,750 delegates are attending the Central Alberta Teachers’ Convention. The… Continue reading

Passengers leave ship docked off Japan after quarantine ends

YOKOHAMA, Japan — About 500 passengers left the cruise ship Diamond Princess… Continue reading

Quebec premier calls for federal ultimatum to end rail blockades within days

OTTAWA — Quebec’s premier says he wants Prime Minister Justin Trudeau to… Continue reading

Canada’s laws don’t apply to chiefs who oppose pipeline

Re: “Blame the chaos on Trudeau,” David Marsden, Opinion, Feb. 15. I… Continue reading

Most Read