On October 3rd, President Bush signed into law the Emergency Economic Stabilization Act of 2008 (Act), which authorized the Treasury Secretary (Treasury) to establish the Troubled Assets Relief Program (TARP) to purchase “troubled assets.” On October 14th, the TARP Capital Purchase Program (CaPP), through which Treasury makes capital investments in banking institutions, was announced as the first TARP program. Please also see our companion article on the newest Treasury capital program, announced February 25, 2009, the Capital Assistance Program.

Below we discuss the CaPP and the potential impact on capital-raising by financial institutions.

Please see full bulletin for more information.