USA HISTORY

Detailed explanation-1: -How Was the Financial Crisis of 2007–2008 Resolved? In September 2008, Congress approved the “Bailout Bill, ” which provided $700 billion to add emergency liquidity to the markets.

Detailed explanation-2: -Housing prices started falling in 2007 as supply outpaced demand. That trapped homeowners who couldn’t afford the payments, but couldn’t sell their houses either. When the values of the derivatives crumbled, banks stopped lending to each other. That created the financial crisis that led to the Great Recession.

Detailed explanation-3: -Treasury established several programs under TARP to help stabilize the U.S. financial system, restart economic growth, and prevent avoidable foreclosures.

Detailed explanation-4: -What is TARP? TARP is the Troubled Asset Relief Program, created to implement programs to stabilize the financial system during the financial crisis of 2008.