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TARP unlikely to bring taxpayer returns
Special Inspector General Neil Barofsky of the Troubled Asset Relief Program testifies during a hearing before the House Oversight and Government Reform Committee on Capitol Hill in Washington, DC.
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TEXT OF INTERVIEW
Bill Radke: Now, speaking of that bank bailout, lets turn to Marketplace's Jeremy Hobson live in New York. Good morning Jeremy.
Jeremy Hobson: Morning Bill.
Radke: We got the quarterly report this morning from the special inspector general for the bailout, the $700-billion TARP program. And he said what?
Hobson: Yeah, this is Neil Barofsky, and he said that out of the $700 billion bailout, there's about $317 billion left. He says we will not get all the money back. Mainly because of AIG and the auto companies, which took some of that TARP money. And he said this this morning on CNBC. After saying that the TARP was successful in rescuing the banks, he did have this caveat.
Neil Barofsky: Because of the moral hazard, because of some of the systemic risks that are associated with making these institutions bigger and bigger, trimming their competition, and giving them the opportunity to take more and more risk, systemically we may be in a more dangerous place even than we were a year ago.
Radke: OK, Jeremy. And meanwhile, some reports this morning about the White House's future plans for the TARP. What's that about?
Hobson: Right, an administration official confirms to Marketplace that the program is going to to start to shut down by the end of the year. That's the program that pumped money into the big banks. It will stop lending to new institutions. And the president expected to announce today some new efforts to lend money to smaller, community banks.
Radke: Marketplace's Jeremy Hobson in New York. Thank you.
Hobson: Thank you.
About the author
Jeremy Hobson is host of Marketplace Morning Report, where he looks at business news from a global perspective to prepare listeners for the day ahead. Follow Jeremy on Twitter @jeremyhobson
Was the point of TARP to make money or to prevent the collapse of the financial system?
I thought the latter, therefore, if money were made it's a bonus, but hitting even alone would be amazing. Without knowing the technical details, my layman's point of view is "money well spent, now break up anything that's too big to fail." (I appreciate what I read Alan Greenspan said: too big to fail is too big to exist. This has been my thought for some time, so I'm glad to see I'm not too far off base there.)
