Former TARP Watchdog: ‘We’re Headed Toward Another Financial Crisis’ [View all]

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http://hereandnow.wbur.org/2013/09/13/tarp-watchdog-banks

Here we are five years later, and the biggest banks are 30 percent larger than they were in 2008.
–Neil Barofsky

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Neil Barofsky is the former inspector general of the Troubled Asset Relief Program (TARP).
He told Here & Now there is a “deep frustration that those perhaps most responsible for the crisis not only weren’t punished, they were rewarded for their conduct.”
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“In 2009 it would have probably been a bad idea to indict one of these companies and face undoing all the hard work that was done to save them in the first place,” Barofsky said. “It’s not just, it’s not fair, but it’s the reality.”
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Barofsky finds it distressing that the rules and regulations that resulted from the financial meltdown do not address the fundamental problems that brought it about in the first place.

“It leaves intact these giant financial institutions that are still too big to fail,” Barofsky said. “Here we are five years later, and the biggest banks are 30 percent larger than they were in 2008. Even when all the rules are done, it doesn’t get to the core of the problem.”
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“We’re headed toward another financial crisis, I believe, because we didn’t fix the fundamental problems and the perverse incentives and the too-big-to-fail problem that was present in the last one.”