WASHINGTON Oct 21 The U.S. government's $700
billion financial rescue program has helped to stabilize the
system, but may be creating systemic problems by fueling a
belief banks will always be bailed out, a watchdog for the
program said on Wednesday.
"Compared to where we were last October there is no
question that the system if far more stable. We were on the
precipice and I think the (Troubled Asset Relief Program)
contributed with the other programs to pull us back," Neil
Barofsky, the special inspector general for the program, told
"But I do think because of the moral hazard, because of
some systemic risks that are associated with making these
institutions bigger and bigger ... systemically we may be in a
more dangerous place even then we were a year ago," he said.
(Reporting by Tim Ahmann, Editing by Chizu Nomiyama)