From Ace of Spades:
It was always intended to keep failing banks from closing or selling or declaring bankruptcy. It was not the purpose of the TARP to give money to "sound financial institutions" as David Freddoso incorrectly wrote last week and many other TARP supporters have claimed recently. Those banks didn't need the help.
So what we now have is a whole lot of functioning banks, only a few of which are genuinely healthy. The investor/depositor is having to make hard choices about putting their money in the healthiest banks or taking a risk with one of the bailed-out banks. That's when he can tell which is which, of course.
To top it off, the Democrats are pushing banks which received TARP funds to increase their lending, even though they may not be adequately capitalized and even though this likely means risky lending. Today, Barney Frank is holding hearings on attaching tighter conditions to TARP funds, including lending requirements.