Bernanke: TARP is Not a $350 Billion Slush Fund

The Federal Reserve chairman makes his views known.

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Federal Reserve Chairman Ben Bernanke made it clear today that that the remaining $350 billion in TARP dough should be used to bolster the financial system -- not  the Big Three automakers, the porn industry, the media or any other thing Congress feels like offering a hand to. This from Michael Feroli at JP Morgan Chase:

Bernanke concluded his talk with a cautionary word for the incoming administration: without stabilization of the financial system, do not expect fiscal stimulus to promote a lasting recovery.  In addition to further capital injections, Bernanke proposed three ways TARP or other public funds could be used to support credit markets: (i) through direct purchases of troubled assets, as the TARP was originally conceived, (ii) asset guarantees for bank portfolios of assets, similar to what was done for Citi, and (iii) the creation of bad banks to take distressed assets off other banks' balance sheets.