Criticism of TARP ‘Moral Hazard’ Unfair, U.S. Official Says

Criticism that “moral hazard” is the main legacy of U.S. taxpayer-funded bailouts is unfair, a Treasury Department official said.

“We recognize that moral hazard is a real and significant concern” in the Troubled Asset Relief Program, Timothy Massad, acting assistant secretary for financial stability, said in a hearing before a House Oversight Committee panel today. “But to suggest that it is TARP’s main legacy is to ignore the facts, and to confuse the response to a crisis with the need to address the causes of the crisis.”