Bailing out the banks cost far more than the US admits

It is too early to tell how much the US spent on bailing out the banks. But what is certain is that it will cost far more than the US government will ever admit, says Matthew Partridge.

In September and October 2008, the US government claimed that unless taxpayer money was pumped into the financial system, there would be chaos. At the time, it was estimated that the US taxpayer could end up losing as much as $350bn.

Three and a half years later things look very different. The latest US Treasury estimates argue that the 'Troubled Asset Relief Program' (Tarp) may only cost $68bn. Indeed, if aid to homeowners is excluded, Tarp's costs fall to $22bn.

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Dr Matthew Partridge
Shares editor, MoneyWeek

Matthew graduated from the University of Durham in 2004; he then gained an MSc, followed by a PhD at the London School of Economics.

He has previously written for a wide range of publications, including the Guardian and the Economist, and also helped to run a newsletter on terrorism. He has spent time at Lehman Brothers, Citigroup and the consultancy Lombard Street Research.

Matthew is the author of Superinvestors: Lessons from the greatest investors in history, published by Harriman House, which has been translated into several languages. His second book, Investing Explained: The Accessible Guide to Building an Investment Portfolio, is published by Kogan Page.

As senior writer, he writes the shares and politics & economics pages, as well as weekly Blowing It and Great Frauds in History columns He also writes a fortnightly reviews page and trading tips, as well as regular cover stories and multi-page investment focus features.

Follow Matthew on Twitter: @DrMatthewPartri