The following commentary comes from an independent investor or market observer as part of TheStreet's guest contributor program, which is separate from the company's news coverage.
NEW YORK ( TheStreet) -- Several weeks back, I wrote that the U.S. banking crisis was not over. As evidence, I pointed to the fact that more than 50% of the 742 banks that borrowed money from the Troubled Asset Relief Program had not even started to pay off their debts. That is costly money for banks -- the dividend rate (read interest) goes from 5% to 9% in four years. That means banks borrowing from TARP in 2008 will start paying 9% this year.
Below, I provide more detail on the problems facing banks that have not repaid their TARP monies. I also look at other indicators of banking problems.
The Role of Regulators
There are two related reasons why banks have not paid off their TARP loans. The first is that they are really strapped. The second is that the FDIC and other bank regulators will not permit it. What do bank regulators worry about? Mostly, the wrong things.Follow TheStreet on Twitter and become a fan on Facebook. After decades of meetings in Basel at the Bank for International Settlements, bankers/regulators have come up with three "accords" to manage banks -- Basel I, II, and III (the U.S. never signed Basel III). But the accords and other efforts by regulators did not prevent the banking collapse in 2008. In Europe, sovereign debt was treated as safe as cash, at least until "the Greek problem" surfaced.