TARP to cost $200bn less than previous estimates

The US Treasury Department expects that the Troubled Asset Relief Program will cost $200 billion less than earlier estimated.

Government had approved $700 billion under the TARP to bail-out financial institutions at the peak of the financial crisis in 2008.

The Obama administration had estimated that the TARP would cost the taxpayer $341 billion, but now it said that it could cut the estimated cost of TARP by $200 billion.

As per new estimates, TARP will cost $141 billion at the most over the next ten years.

Lenders have already returned government loans worth $71 billion, while Bank of America Corp. has announced recently that it wanted to repay $45 billion government loan, which would push the figure to $116 billion.

As much as $175 billion are expected to be repaid by banks by the end of 2010.