Which U.S. government program authorized up to $700 billion to address the 2008 financial crisis?

The Troubled Asset Relief Program authorized up to $700 billion to address the 2008 financial crisis.

Congress created TARP through the Emergency Economic Stabilization Act, signed on October 3, 2008. The program was initially designed to let the U.S. Treasury purchase troubled mortgage-related assets from financial institutions, helping stabilize banks whose balance sheets had been damaged by the housing collapse.

TARP’s implementation changed as officials concluded that direct capital injections into banks could act more quickly than large-scale asset purchases. The program also supported parts of the automotive industry and other financial interventions. The authority was later reduced, and the eventual cost to taxpayers was far below the original $700 billion ceiling.

TARP is sometimes confused with the Federal Reserve’s emergency lending programs. The Treasury program was established by Congress, while the Federal Reserve used its separate authority to provide liquidity and support credit markets.