Watchdog: Five Years After Wall Street Meltdown, 'Toxic Culture of Greed and Risk' Remains

According to the government watchdog created to guard over the federal bailout of the Wall Street banking industry in the wake of the 2008 housing collapse and financial crisis, all of the sinister ingredients that created the crisis five years ago—including “rampant risktaking,” “greed,” and “significant unchecked power”—remain pervasive throughout the “toxic” corporate culture that rules the financial industry.

When the industry was on the verge of total collapse in late 2008, the Treasury Department, Congress, and the Federal Reserve stepped in to backstop teetering Wall Street banks with a cash infusion of $700 billion in taxpayers’ funds under a program call the Troubled Asset Relief Program (or TARP). Subsequent to the allocation of those funds, Congress established an oversight agency, the Office of the Special Inspector General for the Troubled Asset Relief Program (or SIGTARP), designed to monitor the program, make sure the funds were used appropriately, and offer feedback to lawmakers and Treasury officials.

Released on Tuesday, SIGTARP’s latest public quarterly report paints a picture of ongoing dysfunction, systemic risk, and complains that much of the advice it has offered to government agencies regarding the restructuring of the financial system and possible ways to help still-struggling homeowners has been ignored.

According to the report (pdf):

Lauding itself for the level of abusive practices it has been able to halt and the number of criminal fraud charges initiated by their oversight work, the report states: