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Financial Bailout Package, a Year Later

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Sunday, September 6, 2009

Obama has said he inherited the financial crisis from President George W. Bush. But he also received a powerful arsenal from his predecessor -- the $700 billion financial bailout package.

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In fact, the inaugural program the Bush administration rolled out after it got that money from Congress may have done more to stabilize the financial system than any of the bailout initiatives announced so far by Obama officials. Last October, the Bush Treasury directly injected hundreds of billions of dollars into ailing banks, abandoning its plan to relieve these firms of toxic assets. The Troubled Assets Relief Program never lived up to its name.

Obama's plan to buy toxic bank assets, announced in February, still hasn't been launched and will be far smaller than initially envisioned. Yet his team deserves much of the credit for its handling of the crisis, some bank analysts say. One signature initiative -- stress tests of the nation's biggest banks -- proved to be important in restoring confidence in the markets.

Perhaps more important, analysts and officials say, the administration presented the reasons for the bailout more clearly, and it did a better job of getting the politics right.

-- David Cho


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