Great Depression Bank Bailouts
The first major bank bailout took place in April 2008, when Bear Stearns (an investment bank and brokerage firm) was given $29 billion in guarantees.
In September 2008, approximately $50 billion was committed to guarantee money market funds and assuage American’s fears.
Then, in October 2008, $700 billion was given to American banks as part of TARP (Troubled Asset Relief Fund). Hundreds of banks were given bailouts, ranging from a $425,000 to $25 billion. Major beneficiaries of this funding given to banks included:
•Wells Fargo ($25 billion)
•JP Morgan Chase ($25 billion)
•Citigroup ($25 billion)
•Morgan Stanley ($10 billion)
•Goldman Sachs (10 billion)
•Bank of New York Mellon ($3 billion)
•US Bancorp ($6.6 billion)
It was later reported that banks that didn’t need the money were nonetheless encouraged to take it so that the American public wouldn’t know which banks were distressed during the Great Depression of 2008 and 2009.
In the fall of 2008, the FDIC also raised its limits on insuring accounts from $100,00 to $250,000.
The increased FDIC limits, along with the bank bailouts, in all likelihood helped avert a catastrophic failure of the American banking system, the likes of which might have made the first Great Depression bank failures pale in comparison.