NEW YORK (
) -- On the five-year anniversary of the failure of
, the White House on Sunday defended its actions to stem the aftermath of the 2008 financial crisis, arguing in a new report that bank stress tests, a post-crisis reform statute and the government's administration of a much-maligned auto and bank sector capital injection program were critical moves and helped stave off another Great Depression.
The report comes as critics contend that five years after the peak of the financial crisis many big banks still lack sufficient capital as a buffer against a future collapse. At the same time, the Dodd-Frank Act, the signature post crisis-reform statute, is still far from fully implemented.
Opponents of the Obama administration's response to the crisis also lament that the capital injection program, known as the Troubled Asset Relief Program, enshrined the belief that big banks -- many of which are even larger than before the crisis -- are too-big-to-fail and would be bailed out again with taxpayers footing the bill.
That is even as the report points out that the government has set up a series of tools to allow a big bank to be dismantled so that its collapse doesn't cause Lehman-like collateral damage to the markets. Plus, taxpayer costs in the unraveling of the institution would be covered by a fee (collected after-the-fact) on big banks.
Specifically, the White House argued that the TARP program was far more successful than anyone expected, pointing out that the Congressional Budget Office had estimated previously that it would cost $350 billion, while the Treasury Department has received nearly $422 billion in payments back from the government's investments in the bailout program and separate injections into
American International Group
Gene Sperling, White House national economic council director, lauded the administration's effort to stress test banks, calling it "the signature element" of the financial stability program. He told reporters on a conference call held to discuss the report, that it drove the big banks to raise $80 billion in capital from private sources within months of the release of the first set of results in 2009.