Barofsky on TARP’s Third Anniversary

Neil Barofsky, former Special Investigator General of TARP, is highly critical of the program on its third anniversary of TAR:

“While successful in helping to prevent financial Armageddon, on TARP’s third birthday it is apparent that Treasury has failed to deliver on the other core promises that it made to Congress and the American people – that TARP would ‘restore lending’ and ‘preserve homeownership.’ Perhaps even more concerning, the inevitable moral hazard that followed Secretary Paulson and Secretary Geithner’s repeated use of TARP funds to back up their pronouncements that they would not let the largest banks fail has not been adequately addressed by regulatory reform. …

“As a result, the TBTF banks are even larger and more dangerous than ever, and could still hold the taxpayer hostage once again in the next financial crisis. Finally, TARP’s most enduring legacy may be the HISTORICAL DISDAIN with which the American people now hold their government, which I believe has been fueled by Treasury administrating TARP with insufficient transparency and with undue deference to the largest financial institutions.”

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