Joe Biden Takes Credit for Creating Lending Invention to Backstop Banks After Meltdown
In the aftermath of the 2008 financial crisis, the global economy was thrown into disarray. Banks collapsed, markets crashed, and businesses shuttered their doors. With the world teetering on the brink of total collapse, then-Vice President Joe Biden stepped up and helped to create a groundbreaking new lending program. Now, nearly a decade later, Biden is taking credit for his role in inventing the Bank Term Funding Program (BTFP), which helped to backstop banks and prevent a total economic meltdown.
The BTFP was a response to the liquidity crunch that followed the collapse of Lehman Brothers and other major financial institutions. Banks were no longer willing to lend to each other, and as a result, the flow of credit throughout the economy ground to a halt. In order to restart the flow of credit and prevent a total economic collapse, the BTFP was created. The program provided funding to banks at rates below the market rate, incentivizing them to continue lending to households and businesses.
At the time, the BTFP was hailed as a groundbreaking measure that helped to stabilize the global economy. It provided emergency funding at a time when banks were under extraordinary stress, and allowed them to continue to make loans to consumers and businesses. The lending rate was lower than other sources of funding such as the market, which helped banks to make more loans.
Now, nearly 10 years later, Joe Biden is taking credit for his role in inventing the BTFP. In a recent speech at the Brookings Institution, Biden spoke about the program and his role in its creation. He explained that he and other members of the Obama administration were instrumental in devising the program, which he said was crucial in preventing a total economic collapse.
“I remember sitting in the Oval Office with President Obama and other senior officials, trying to figure out how we could prevent a total economic collapse,” Biden said in his speech. “We knew that we needed to provide emergency funding to banks, but we also knew that we couldn’t simply hand them a blank check. We needed to create a system that would encourage them to continue lending to households and businesses. That’s why we came up with the Bank Term Funding Program.”
Biden’s comments have sparked a debate among financial experts and political analysts. Some have accused him of taking undue credit for a program that was the result of much broader efforts. Others have praised his role in devising the program and helping to stabilize the global economy. Regardless of the controversy, it’s clear that the BTFP was a critical component of the response to the financial crisis, and helped to prevent a total economic meltdown.
Overall, Biden’s role in inventing the BTFP underscores the importance of bold, creative solutions in times of crisis. As the world continues to grapple with the COVID-19 pandemic and other challenges, it’s clear that innovative thinking and decisive action will be needed in order to protect the global economy and ensure a stable, prosperous future for all.