Herb Allison, the prospective head of the $700bn troubled asset relief programme (Tarp), on Thursday said the Obama administration would retain some of the $100bn in unspent funds as a buffer in case the crisis deepened.

“It’s important that we leave some headroom in this programme, because we’re not yet out of this crisis,” Mr Allison said at his confirmation hearing. “The Treasury and the government need some flexibility so that, if there’s a need in the future, we can intervene in a timely manner.”