Monday, February 01, 2010
The latest quarterly report from the Troubled Asset Relief Program’s (TARP) overseer offers at best a mixed review of the federal rescue that began in the fall of 2008, noting the fact that the program has helped stabilize an industry on the verge of ruin. However, little has been done to prevent another catastrophe, leaving financial institutions—and the U.S. economy—in a precarious state.
“Stated another way, even if TARP saved our financial system from driving off a cliff back in 2008, absent meaningful reform, we are still driving on the same winding mountain road, but this time in a faster car,” reads the report.
Many of TARP’s stated goals have not been met, according to Neil Barofsky, TARP’s special inspector general. For instance, the Capital Purchase Program was supposed to improve lending to businesses and consumers—but instead, financing continues to decrease month after month. Also, the Department of the Treasury (where TARP is located) has not bothered to create a new program designed to bolster lending to small businesses. Plus, TARP hasn’t slowed down the rate of home foreclosures which “remain at record levels.”
-Noel Brinkerhoff
SIGTARP Quarterly Report (Office of the Special Inspector General for the Troubled Asset Relief Program) (pdf)
TARP Overseer Says Bank Bailout Program Has Mixed Results (by Ronald D. Orol, MarketWatch)
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