This is a case study in moral hazard: Saving the banks has increased the likelihood they will behave even more recklessly in the future. And let’s not forget what the end result was: seizing billions of dollars from the American people and giving it to Wall St. bankers. It was the biggest heist in American history. The S&L bailout looks like the looting of a ATM by comparison.
The problems that led to the last financial crisis have not yet been addressed, and in some cases have grown worse, says Neil Barofsky, the special inspector general for the trouble asset relief program, or TARP. The quarterly report to Congress was released Sunday.
The government’s bailout of financial institutions deemed “too big to fail” has created a risk that the United States could face a worse fiscal meltdown in the future, an independent watchdog assigned to review the program told Congress on Sunday.
The Troubled Assets Relief Program, known as TARP, has not addressed the problems that led to the last crisis and in some case those problems have festered and are a bigger threat than before, warned Neil Barofsky, the special inspector general at the Treasury Department.
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