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Although the law creating the U.S. rescue program called for Treasury to coordinate its actions with similar efforts by foreign governments, "the global response to the financial crisis unfolded on an ... informal, country-by-country basis," the new report says. "Each individual government made its own decisions based on its evaluation of what was best for its own banking sector and for its own domestic economy." The U.S. program wound up injecting capital into around 700 banks, while all other governments combined aided fewer than 50, according to the oversight panel. At the same time, the report suggests that the Treasury program, known as the Troubled Asset Relief Program, or TARP, may have played a constructive role. "It appears that the existence of the TARP might have served to enhance the negotiating position of the U.S. government (at least in a limited way), as it demonstrated the willingness of U.S. officials to be aggressive and forceful in committing a significant amount of resources to confront a deepening crisis," the report says.
Treasury Department spokesman Mark Paustenbach said the report "shows that Treasury worked effectively with its overseas partners in a number of ways to address the global financial crisis." The report says the financial crisis revealed the need for an international plan "to handle the collapse of major, globally significant financial institutions."
[Associated
Press;
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