As the Obama Administration prepares a new TARP-like program, this time targeting smaller, community and local banks, Inspector General Neil Barofsky thinks “it’s unrealistic to think we’re going to get all that money back” in a statement made Wednesday according to Associated Press sources.
The Treasury has spent in excess of $450 billion through TARP programs, and just a few under fifty recipients have paid back about $73 billion worth.
Later today, Obama is expected to announce a community bank assistance plan, as the American Bankers’ Association has asked for some $5 billion in aid, in an effort to extend lending to Main Street.
Barfosky graded TARP “an incomplete” on CBS’s “The Early Show” but noted, its “pulling us back” from the brink of collapse.
A quarterly report, scheduled for release later today, will further detail Barofsky’s findings.
Notes an article published by the Associated Press:
"Despite the aspects of TARP that could reasonably be viewed as a substantial success," he wrote, "Treasury's actions in this regard have contributed to damage the credibility of the program and of the government itself, and the anger, cynicism and distrust created must be chalked up as one of the substantial, albeit unnecessary, costs of TARP."
Barofsky was quick to note, that the plan has come under “suspicion” fed by the Treasury’s decision to not require banks to disclose how they’re using the rescue money, fueled by “less-than-accurate” statements about the actual financial conditions of nine large institutions that benefited from TARP.
The upcoming report will describe initiatives under the TARP plan, some to help Wall Street, others to bailout Main Street.
In his report, Barofsky credits the Fed and the Treasury for adopting some accountability recommendations, but several of his agency’s ideas for greater transparency to taxpayers have gone unnoticed.