In Too Big to Fail: How Wall Street and Washington Fought to Save the Financial System — and Themselves, Andrew Ross Sorkin provides new details about what was then a secret Treasury plan to save the banking system presented on April 15, 2008 — five months before TARP was introduced — to Federal Reserve chairman Ben Bernanke. The plan, called the “Break the Glass” Bank Recapitalization Plan, was written by Treasury staffers Neel T. Kashkari and Phillip Swagel. The plan was the basis for the TARP proposal made in September 2008 after the financial panic began.

The “Break the Glass” plan contemplated that the government would buy toxic assets from the nation’s banks. It also discussed several other strategies for the government to help ailing banks using $500 billion of taxpayer money — including making direct capital injections into the banks. (The ultimate TARP plan called for $700 billion.)

Remarkably , the 10-page document discussed the pros and cons of buying toxic assets. Among the cons, the Treasury staffers identified two that continue to cause public outrage:

“Without a complimentary program, does nothing to help homeowners (for which there would be enormous political pressure)”

“No guarantee banks will resume lending.”

Up until now, the full “Break the Glass” document has never been discosed. The paper, which was obtained by the author during the course of his reporting for the book, was used as a source document in Chapter Five of Too Big to Fail: How Wall Street and Washington Fought to Save the Financial System — and Themselves.

Here it is:

Too Big To Fail: Confidential “Break the Glass” Plan from Treasury