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CRISIS AND PANIC 

“The whole reason for designing the program was so many banks would take it,
would have the capital, and that would lead to lending. That was the whole purpose,”
Paulson told the FCIC. However, there were no specific requirements for those banks
to make loans to businesses and households. “Right after we announced it we had
critics start saying, ‘You’ve got to force them to lend,’” Paulson said. Although he said
he couldn’t see how to do this, he did concede that the program could have been
more effective in this regard.  The enabling legislation did have provisions affecting
the compensation of senior executives and participating firms’ ability to pay divi-
dends to shareholders. Over time, these provisions would become more stringent,
and the following year, in compliance with another measure in the act that created
TARP, Treasury would create the Office of the Special Master for TARP Executive
Compensation to review the appropriateness of compensation packages among
TARP recipients.
Treasury invested about  billion in financial institutions under TARP’s Capi-
tal Purchase Program by the end of ; ultimately, it would invest  billion in
 financial institutions. 
In the ensuing months, Treasury would provide much of TARP’s remaining 
billion to specific financial institutions, including AIG ( billion plus a  billion
lending facility), Citigroup ( billion plus loss guarantees), and Bank of America
( billion). On December , it established the Automotive Industry Financing
Program, under which it ultimately invested  billion of TARP funds to make in-
vestments in and loans to automobile manufacturers and auto finance companies,
specifically General Motors, GMAC, Chrysler, and Chrysler Financial.  On January
, , President Bush notified Congress that he intended not to access the second
half of the  billion in TARP funds, so that he might “‘ensure that such funds are
available early’ for the new administration.” 
As of September —two years after TARP’s creation—Treasury had allocated
 billion of the  billion authorized. Of that amount,  billion had been re-
paid,  billion remained outstanding, and . billion in losses had been in-
curred.  About  billion of the outstanding funds were in the Capital Purchase
Program. Treasury still held large stakes in GM ( of common stock), Ally Finan-
cial (formerly known as GMAC; ), and Chrysler (). Moreover, . billion of
TARP funds remained invested in AIG in addition to . billion of loans from the
New York Fed and a  billion non-TARP equity investment by the New York Fed in
two of AIG’s foreign insurance companies.  By December , all nine companies
invited to the initial Columbus Day meeting had fully repaid the government. 
Of course, TARP was only one of more than two dozen emergency programs to-
taling trillions of dollars put in place during the crisis to stabilize the financial system
and to rescue specific firms. Indeed, TARP was not even the largest.  Many of these
programs are discussed in this and previous chapters. For just some examples: The
Fed’s TSLF and PDCF programs peaked at  billion and  billion, respectively.
Its money market funding peaked at  billion in January , and its Commer-
cial Paper Funding Facility peaked at  billion, also in January .  When it
was introduced, the FDIC’s program to guarantee senior debt for all FDIC-insured