Troubled Asset Relief Program, or TARP, is over - more specifically, its legal authority expires on Sunday, so it cannot be used for new "bailout" activities (although legacy programs, with money already disbursed, could last 5 to 10 years.)
three mistakes were made in the implementation of TARP.
- there was no need to be so excessively generous to the financial executives (and their boards) at the institutions that had to be saved. In part this generosity was due to insufficient safeguards
- missed the opportunity to change the structure and the incentives of Wall Street when it had the chance,…notion that our biggest six banks are untouchable today is uncontroversial. Their creditors know this, so these banks can borrow more cheaply than their smaller competitors, they can become larger relative to the economy, and if you doubt the risks that this poses, just look at the situation today in Ireland.
- time the administration put forward its financial reform ideas, the big banks were back on their feet - and ready to throw huge numbers of lobbyists and unlimited cash into the fight to preserve their right to take inordinate risk and to mismanage their way into disaster….Dodd-Frank Act, while including some sensible consumer-protection measures, essentially does very little to reduce system risk as we move into a new credit cycle.
Click on the following for more details: TARP, the Long Goodbye - Yahoo! Finance
