Obama signs the biggest US financial-rules collection since Great Depression

As it became known, Barack Obama has signed Wednesday the biggest US financial-rules overhaul since the Great Depression. 

This legislation, that gives regulators tools to avoid the need for future rescues such as the $700 billion Troubled Asset Relief Program, was called by Treasury Department’s assistant secretary, Herbert Allison, as a “major watershed” for the government’s bailout programs.

The new law is also supposed to forbid the Treasury from starting new programs and limits the funding available to existing efforts.

As Allison claimed, though TARP was unpopular, it was necessary. “Now the government is going to have much better tools.”

As stated Douglas Elliott, a research fellow at the Brookings Institution who specializes in banking,shrinking TARP is a victory for the Obama administration.

Meantime, Allison stresses the Treasury’s Office of Financial Stability is planning how to manage the Treasury’s ongoing investments in housing and the banking system

Besides, targeting to be compliance with the new legislation framework, the Treasury has shrunk the amount of money available for some TARP initiatives. The total auto industry aid program has shrunk by $3 billion to $81.8 billion, and the Public-Private investment Program is set at $22.4 billion, $8 billion less than initially planned. The Home Affordable Modification Program has a total possible amount of $45.6 billion, down $3.2 billion from earlier plans.