From the FINANCIAL TIMES:
The US Treasury helped create a “toxic cocktail” of “subsidies” and “market distortions” with the Wall Street bail-out, according to the outgoing chief overseer of the government’s main rescue programme.
The image of the troubled asset relief programme has been rehabilitated since it became clear last year that the US government should recover most of the $700bn made available by the Bush administration to shore up the financial system in 2008.
But at one of the last of many congressional hearings examining Tarp, Neil Barofsky, the programme’s special inspector-general, said the better than expected financial outcome disguised the “moral hazard and the legacy of ‘too big to fail’ that Tarp has left” and “the very real harm to government credibility though mismanagement of this programme.”
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