Remember Neel Kashkari? At the time of our previous post, his future was unknown because of the change of governments.
Kashkari still oversees $700 billion (or remainder thereof)
img: via Time
Turns out Neel (Darth) Kashkari stayed on despite losing his mentor, Hank (Emperor) Paulson and remains at the helm of TARP (Troubled Assests Relief Program), another term for bad loans made by banks and other financial institutions.
Kashkari recently surfaced defending his deathstar, a.k.a TARP funds to financial institutions, as Congress questioned his approach. [CNN Money]
The point of contention here is funding of banks with bailout money and the amount of oversight to be placed on these banks by the government.
Congressional delegates stressed on the need for oversight of the way banks spent this money.
“If the banking system is in serious enough trouble to require massive amounts of federal support, shouldn’t that federal support be channeled to the domestic economy?” Kucinich asked Kashkari.
He questioned the decision of Treasury to let many of the same management teams that helped precipitate the crisis remain in place to oversee the use of hundreds of billions of federal dollars
“Is it tolerable to continue to defer to that judgment and allow them to spend taxpayers money, with no explanation, little accountability, with no questions asked?” Kucinich said.
Neel’s contention was that there should be a distinction between the financial giants like AIG Citigroup and smaller community banks, which were in better shape. More government interference would actually result in the smaller banks turning down the money to put back into the economy.
Kashkari stressed that there was a distinction between the hundreds of banks who have received federal money through capital injections and the separate rescues for Citigroup, Bank of America, and AIG. The government wants the former group, which includes many community banks, to receive money because they are generally healthier and can use the money to lend back into the economy. He said he was worried about a growing number of such banks declining TARP funds because of concerns about government interference.
Kucinich makes a valid point about accountability and, I think, Kashkari did a great job defending his approach.
Loading ...