February 12, 2009

Laying Out the TARP

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Key materials
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With the first phase of TARP behind us, and TARP II ready to begin, this course will examine some of the potential challenges and hazards of this extraordinary involvement in the financial sector. With the federal government taking various degrees of ownership of banks, what can policymakers expect will be the outcome? In the third installment of our ongoing series on the current financial crisis, the Mercatus Center will present a panel of experts to discuss these issues and answer important questions, such as:

  • What conflicts could arise between the interests of shareholders and those of taxpayers?
  • What will be the Treasury’s duties to shareholders and how will companies pursue their traditional ends of wealth maximization?
  • What’s the difference between preferred and common stock, and how does each change the role the government will play?
  • What are the benefits and costs of creating an Aggregator Bank?
  • What lessons can we draw from other countries’ experiences in similar interventions in light of this new role for government?
  • What alternatives are available under TARP to recapitalize banks using existing resources?