Washington closes out last big position in Wall Street bailout
(REUTERS) – The United States closed out its last big investment taken on during a 2008 bailout of U.S. banks and automakers, selling its remaining shares in the former financing arm of General Motors, the U.S. Treasury said on Friday.
The U.S. Treasury made deals to sell about 55 million shares in Ally Financial for $1.3 billion, which a Treasury official said was organized to take advantage of strong stock prices seen in the last few days.
Shares in Ally Financial, which was formerly known as GMAC, rose 3.7% in Friday morning trading.
Treasury’s sale of the shares leaves taxpayer investments in the financial industry at less than $1 billion, spread out among 35 small community banks, said Timothy Bowler, a deputy assistant secretary at the Treasury, in a telephone call with journalists.
In 2008, during a financial crisis and profound recession, Washington bailed out a host of banks, big and small, as well as automakers General Motors and Chrysler. As of Wednesday, taxpayers had spent $426 billion under the Troubled Asset Relief Program signed into law by former President George W. Bush.
Taxpayers have recovered almost all of their TARP investments, losing money on automakers but turning a profit on the financial sector bailout.
The TARP program also pumped money into housing programs, and continues to do so.