Washington, 10 February 2010

"It was one year ago today that the Obama Administration outlined a Financial Stability Plan to address the four problems at the heart of the financial crisis: frozen credit markets, weakened bank capital, a backlog of troubled mortgage assets on bank balance sheets, and falling home prices.  At the time, with America in a deep recession, it did not matter if you were a company large or small, a family trying to buy a house, a car or even to put your kids in college; loans were not available.

"A year later, the actions we took, alongside the Recovery Act, have worked to restore economic growth and financial stability.  Access to credit is improving and the cost of borrowing for businesses, consumers, homeowners, and state and local governments have fallen sharply.  In addition, we have achieved this progress at much lower cost than anticipated.  By encouraging private capital solutions rather than relying on public funds, the expected cost of stabilizing the financial system has fallen by more than $400 billion. We expect it will fall even further. And if Congress joins the President in adopting a Financial Crisis Responsibility Fee, Americans will not have to pay one cent for TARP.

"These measures of the direct financial costs of the crisis do not capture the economic devastation caused by the crisis.  The financial system is healing, but still damaged, and we have a lot of repair work still ahead."

Ends --

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