Four billion dollars later and nearly 100 U.S. banks that got help from the federal government are in danger of collapsing. The Troubled Asset Relief Program (TARP) was supposed to only help healthy financial institutions weather the crisis that unfolded in 2008. But now that 98 banks are on shaky ground, it is possible that TARP officials weren’t being entirely truthful.

 

Seven TARP recipients have already failed, resulting in more than $2.7 billion in lost bailout funds. This total is in addition to the $4.2 billion that could go down the drain if all of the 98 troubled banks fail as well.

 

Chris Cole, a lawyer with the Independent Community Bankers of America, told The Wall Street Journal that smaller TARP recipients were more vulnerable because the big banks, such as Bank of America and Citigroup, also received loans from the Federal Reserve’s emergency liquidity programs, which distributed $3.3 trillion.

-Noel Brinkerhoff, David Wallechinsky

 

Bailed-Out Banks Slip Toward Failure (by Michael Rapoport, Wall Street Journal)

Federal Reserve Finally Forced to Reveal What it Did with $3.3 Trillion (by David Wallechinsky and Noel Brinkerhoff, AllGov)