Banks finally purging toxic assets after 3 years of hold and hope. as noted in this NY Times Deal Book article.
It defies logic that the the federal government let the banks kick back and wait for the crisis to pass. The interests of the banks and other Wall Street players were put well ahead of the interest homeowners.
The bait and switch move played with the tarp was classic political negligence that is often perpetrated on the American Tax Payer in the "best interest of the country." Imagine if the government had forced the banks to follow through on the sale of the toxic assets on the big bank balance sheets. We may have had a far better outcome than the 3 years and counting recession.
Yes, that was the plan put forth by the government before TARP, but After TARP the plan was changed to just let the banks sit on the money in the hopes that they could recover all of the profits they would be forfeiting with the write downs.
The Insider Trading and Securities Fraud Enforcement Act of 1988 and expansion of control person liability
The TBTF (too big to fail ) banks really pulled it of well. But they likely knew if the democrats took over they would not dare question the use of tarp funds and by the time the depths of the problems with the securitization trusts surfaced, it would be too late to drag things out any further. Again too late to drag things out " in the best interest of the country."
Not only did the regulators not do their job of over site prior to the financial crisis, they are not doing anything about the nefarious actions of the banks and brokers that is still going on as banks stall for more time to try and remedy a situation that can only be fixed by illegal activity.
more on banks holding of toxic assets here