The biggest banks are 20 percent larger than they were before the crisis and control a larger part of our economy than ever. They reasonably assume that the government will rescue them again, if necessary. Indeed, credit rating agencies incorporate future government bailouts into their assessments of the largest banks, exaggerating market distortions that provide them with an unfair advantage over smaller institutions, which continue to struggle.
In the final analysis, it has been Treasury's broken promises that have turned TARP - which was instrumental in saving the financial system at a relatively modest cost to taxpayers - into a program commonly viewed as little more than a giveaway to Wall Street executives.That "friendly banker" inside the Chase-Meatball building? He ought to kiss your toe.
But he won't.