TARP chief: Banks possibly 'in more danger now'
[cnn-photo-caption image= http://i2.cdn.turner.com/cnn/2009/images/04/21/art.neil.gi.jpg caption="TARP Special Inspector General Neil Barofsky said the government's decision to support bank mergers may have put the U.S. economy more at risk."]
WASHINGTON (CNN) - The banking system today may be in a more precarious position than it was a year ago, the man charged with overseeing a $700 billion bailout program said Wednesday.
Neil Barofsky, the special inspector general managing the Troubled Asset Relief Program, told CNN's Wolf Blitzer on Wednesday that the government's decision to support bank mergers over the past year may have put the U.S. economy more at risk.
"These banks that were too big to fail are now bigger," Barofsky said. "Government has sponsored and supported several mergers that made them larger and that guarantee, that implicit guarantee of moral hazard, the idea that the government is not going to let these banks fail, which was implicit a year ago, is now explicit, we've said it. So if anything, not only have there not been any meaningful regulatory reform to make it less likely, in a lot of ways, the government has made such problems more likely.
"Potentially we could be in more danger now than we were a year ago," he added.
Earlier in the day, Barofsky issued a scathing report criticizing the Treasury Department for not being transparent enough about how bailout money was being spent. He warned that this could have lasting effects.
"I think this cynicism, this anger, this distrust of government that's born in part from a lack of transparency could have far-reaching ramifications, whether there's a next crisis or when anytime the government is going to call on the American people, the taxpayer, to support necessary programs," Barofsky said.
From CNN Politics
- Democrats' struggles to stay united are just beginning on Covid relief and Cabinet watch February 24, 2021 06:19 pm
- Biden's CIA director pick skates through confirmation hearing and receives bipartisan praise February 24, 2021 06:17 pm
- Democrats now at odds over whether to immediately seek postmaster general's ouster February 24, 2021 05:47 pm
- PA GOP expected to consider censure of Sen. Pat Toomey over vote to convict Trump February 24, 2021 05:38 pm
- Republicans sharply question Haaland at second day of confirmation hearing February 24, 2021 05:26 pm
- Postmaster General Louis DeJoy apologizes again for slow mail February 24, 2021 04:51 pm
Personally, I trust the federal government a lot more than I trust the CEOs and Directors of my bank or any other bank. Those guys would sell their daughters into slavery to move the stock price up a nickle. They would bankrupt the nation to have a good year and a big bonus.
Nice Going Obama! The only reason Bush signed the TARP stuff is because you and your Terrorist buddies made him!
What a joke- most business that are on the verge of failure normal survive by scaling back and getting more efficient. Only with the banking system can you almost fail and get bigger in the process. It's not the government fault, this is an institutional problem
Someone please make sure that NO ONE from Goldman Sachs has anything to do with deciding which banks will get how much money and when.
Folks, we've been had by the politicians. Time to clean house.
This man gives us the straight reality. Those big banks got bigger and now can take even more risks. Banks can't make money without taking risks. Banks have raised banking fees to far higher levels and they use these revenue streams to take more risks. Further down the road, some of these bigger banks will be in greater trouble, and Mr. and Mrs. Taxpayer won't be ready and willing to assist again.
This report is timed just right as congress waters down legislation to reform the banks. And the cowardly members have managed to avoid having their votes recorded on the record. They should all be removed from office when their terms are up! When is congress going to do the right thing for the American people when it comes to the banks!
No more bailouts! You fail, you fail!
Those of us thought that the first time. Why are you Obamabots so gullable!!????? obama is a power hungry fraud.
Another example of why government needs to stay out. Whenever they try to fix something, it affects something else and ultimately ends up messing up the economy (see housing/Freddy and Fanny, energy policies, healthcare/hippa...).
Obama needs to stop trying to grow the government into every part of our lives and focus on national security and enforcing real laws.
Obviously if you don't loan out money and try to save some of these foreclosed homes then naturally you will be in trouble. Some of these houses could have been saved but they (bankers) wanted to be arrogant and cocky. It is so ridiculous.
Thanks Barney Frank and Chris Dodd for advocated mortgages to those who can't qualify!!
Dodd is a crook...but he got his sweetheard deal from Countrywide. Quit trusting these crooks! Take away their power, and gimme back my money
"Nice Going Obama! The only reason Bush signed the TARP stuff is because you and your Terrorist buddies made him!"
Thank you for filling my crazytalk quota for the day.
What Barofsky is saying should be of topmost concern to people, equal to obtaining health care reform. Unfortunately, lack of substantive legislation with real teeth is a failure by EVERY CONGRESSPERSON. "Too big" shouldn't be a problem coupled with "well regulated," but this is an area where they're all on the take. They may all be subject to laws that prevent them from knowing precisely where their investments really are, but I guarantee you it doesn't take a rocket scientist to figure out that they're investments are being managed by one or more of these institutions.
That's right. The Great American Heist. Never in United States history have taxpayers been swindled out of so much money: $23 trillion. And the big banks keep right on stealing from taxpayers. Shock and awe came home, and when it did, it took taxpayers for serious loot!
Reported today bonus pay, salaries and perks for tarp $ spenders will be controlled by the government; one question? When will the patroling of the big tarp $ spenders such as Citi and Chrysler begin?
I thought there is already laws prohibiting the amount of mergers of ANY huge business that can be made. But then I forgot, this is the Corpocracy. What's really disgusting is the people who tried to tell the SEC or anyone who would listen what was and is going on and they been vilified. I really think ol Greenspan should be taken to task. The man seems to me to be another one of the liars and crooks. What is equally disgusting is all the people on The Hill who have known for years what is going on and what all laws are being violated and have done nothing to stop the raping of America via Air Money. There needs to be a law banning Derivatives. It's all a looney gambling game with Air Money. Where's the proof of tangible assets? Where's some real proof of any discipline that has to do with the banks/wall street and greedy bastards?(besides Madoff). These guys are terrorizing the country just as much as the 'terrorists' we are at war with. Evil is evil. No matter what style it comes in.
Only NOW, I have an obvious consequence/solution combo.
IF the banks fail, and we, as a society, are forced to start over, from the rubble of a financial Armageddon, Americans will come together to find solutions, LOCALLY!
As in the story "Stone Soup," with a little cajoling and a LOT of cooperation, the local businesses will come together with their employees and FIND A WAY TO SURVIVE, THEN SUCCEED. That is the true/core American way.
As in the "Wizard of Oz," Corporate America only has power/value as long as we allow it. They are behind the curtain, pulling levers and adding nothing meaningful.
YES, it would be painful, YES it would take time, and YES, there would be suffering, but it wouldn't be just us little guys. If "Big Bankers" can't find a job because no one trusts them, maybe they can just live off of whatever we leave them (AFTER TAXES).
America is smarter than this, brighter than this, but we have become LAZY... AND, I think we have forgotten the value of work in a world where we "should" get rich quick without doing anything meaningful, because that is what "capitalism" has become.
Like I said a year ago:
LET THEM FAIL!
I would like to know if we as taxpayers who "own" a controlling interest banks can step in and deny the CEO's all those big bonus...remember the share holders can vote on things for a company and since "we" own such a big chunk...how about it. Does anyone else agree.
Put $10 of our money down this drain, and in 2012 I will vote for the next Republican fool that they put on the presidential ticket. No company can be considered too big to fail, given their greed and idiotic business practices. Anyone who has their money invested in these disasters deserves to lose that money when reality hits.
This man's warning is real, in the form of a report. Now I am worry for him what the communication director Anita Dunn, Rohm Emmanuel, and David Axelrod will do with him, the way they would with people who criticize Obama's programs.
"Government is not the solution to the problem.
Government IS the problem."
Ronald Regan
Liberals take some lessons from history Socialism ALWAYS fails. Find out now before you ruin this country and further..
Restore the Glass-Steagall Act of 1933, repeal the Gramm-Leach-Bliley Act of 1999, and let's do some old fashioned trust-busting! What are we waiting for?!
"Government is not the solution to the problem.
Government IS the problem."
Ronald Regan
Liberals take some lessons from history Socialism ALWAYS fails. Find out now before you ruin this country any further..
CNN does this violate you rules or do you just post liberal viewpoints.??
"Government is not the solution to the problem.
Government IS the problem."
Ronald Regan
Liberals take some lessons from history Socialism ALWAYS fails. Find out now before you ruin this country any further..
CNN does this violate your rules or do you just post liberal viewpoints.??
Just federalize all the banks and be done with it! Straighten them out and then let some honest folks (perhaps the people who run credit unions?) step up to the plate and re-aquire them.
In the meantime, prosecute all the execs of these banks. You really don't need much evidence; their failures are pretty well-known. Throw them in jail and let them rot!
if only congress had listened to their constituents and not bailed out the banking fatcats...
I think this guy needs to open his eyes
if banks fail then economy tanks
bush did something right when he back the banks