The film is all about the financial crisis that hit the US in 2008 which resulted in the implementation of Troubled Asset Relief Program (TARP). TARP is a program of US Government to purchase toxic assets and equity from financial institutions to strengthen its financial sector. Many top financial institutions had a hard time staying solvent while their large businesses lost value. One of the top brokerage firms, Lehman Brothers, went into bankruptcy. Bear Stearns was saved when JP Morgan purchased it. Another problem arises when the largest insurance company, the AIG, began to collapse.
US Treasury Secretary Henry Paulson realized that if AIG will fail, its insurance portfolio will default and the whole financial industry will suffer losses. The AIG was saved only with government assistance. The Treasury took over the Company. The home lending companies, Fannie Mae and Freddie Mac were taken over too. The President of the Federal Reserve Bank of New York attempts to arrange mergers between consumer banks and investment banks in order to allow investment banks access to the Fed’s discount window. Paulson decided that the only way to get credit flowing again is through direct capital injections.
He told the participating banks that they will receive capital injections to get credit moving again. The financial institutions agreed to this but Henry Paulson put additional restrictions on these terms. The Government hoped that the financial institutions will use the funds as to what really they are intended for. The US Government really did everything in order for these big banks not to fail in 2008 because of the fear that this may highly affect and damage the financial system.
