Which is the worst bank in the US?
Bankers and investors are concerned about a potentially damaging report by the Consumer Financial Protection Bureau (CFPB), which is tasked with regulating the nation’s big banks.
The CFPB has already warned of potential regulatory consequences of the bank bailout program that was launched in November.
The agency has been tasked with finding a way to end the bailout of the nation´s biggest banks, which are run by large corporations and have received taxpayer bailouts, and are expected to be back on the market in coming weeks.
Its report, released late on Friday, found the Federal Reserve had been too quick to extend the program and that it had not done enough to curb risky lending practices.
It also said it could take time to reach a deal on the terms of a new rescue, given the banks are still in the midst of the crisis.
The report is the latest in a series by the CFPBs own internal watchdog that found systemic flaws in the bailout program.
The agency has also called for more oversight of the mortgage finance companies that bailed out the banks.
Bankers and other financial institutions have been calling for an independent watchdog to oversee the CFSB, which is currently headed by former Democratic senator Elizabeth Warren, a critic of the bailout.
The Fed did not immediately respond to a request for comment on the report.
Its analysis is likely to be heavily weighted in the bank lobby, which has a vested interest in ending the bailout, said Andrew Liveris, an associate professor at Stanford University and the co-author of a recent report on the CFEB that criticized the agency.
“The bank lobby has been very vocal about their opposition to the CFAB report,” he said.
The banks are among the biggest recipients of taxpayer aid and were one of the biggest contributors to the 2008 financial crisis, with about one-third of all federal government funding.
The bank bailout was a major stimulus measure after the 2008 recession, which led to the largest economic downturn since the Great Depression.
The Federal Reserve, which oversees the banking system, has said it will continue to tap into the banking sector during the crisis, even as it faces mounting criticism from lawmakers over the size of the rescue program and its potential to trigger another financial crisis.