| The U.S. Treasury's Troubled Asset Relief Program has been partially successful in recapitalizing banks. Nevertheless, the TARP still has work to do because investors- both depositors and holders of bank debt, apparently now seek a significantly larger capital cushion in banks than they did prior to the current crisis. Assuaging investor concerns apparently will require not only capital infusion to replenish an estimated hundreds of billions of dollars of unrecorded losses, but an additional buffer that would add a needed several percentage points to the capital asset ratio . Moreover, until risk-taking investors freely fund banks, loan officers will remain chary of granting new loans. To stabilize the American Banking System and restore a normal lending, additional TARP funds will be required. |
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