The direct cost for the US government's financial crisis rescue efforts will total less than 1 per cent of gross domestic product, considerably less than past systemic crises, US treasury secretary Timothy Geithner said today.
Mr Geithner told a bailout watchdog group the treasury expects to earn a positive return on its remaining investments in banks, automakers, credit markets and American International Group as part of the $700 billion Troubled Asset Relief Program.
"The cost of TARP is likely to be no greater than the amount spent on the program's housing initiatives," Mr Geithner said in prepared testimony to the Congressional Oversight Panel.
He said the direct financial cost of TARP was once estimated as high as $350 billion by the Congressional Budget Office but was now "likely to cost a fraction of that amount". He cited a new CBO estimate that TARP's cost will be as low as $25 billion.
The Treasury's most recent all-in cost estimate for TARP, including expected gains from AIG investments, is about $30 billion.
Reuters