Richard Kovacevich just can't let it go.
The ex-Wells Fargo chief executive who once famously called the Troubled Asset Relief Program "asinine," this week used even more colorful language to describe a program that many credit for rescuing the banking industry and staving off economic catastrophe.
In a speech Tuesday at the Stanford Institute for Economic Policy, Kovacevich called Tarp an "unmitigated disaster" and said it "contributed to an unnecessary panic…that still hasn't been restored."
He also reiterated that Wells did not need the $25 billion it received and said he only accepted it because then-Treasury Secretary Henry Paulson told him that Wells would be declared "capital-deficient" if it didn't.
"This was truly a 'godfather moment.' They made us an offer we couldn't refuse," Kovacevich said, according to a report in the San Francisco Business Times. He added that he might have put up more of a fight if Wells Fargo (WFC) had not been trying to acquire troubled Wachovia at the time.
Kovacevich, who left Wells in 2009, was among the most vocal opponents of the bailout, so in some respects his comments are not surprising. Still, while there was plenty of skepticism about Tarp at the time, many industry observers now believe the program was a success. Some of its investments have soured, but the government has recouped the entire $245 billion in invested in banks — and then some — an it is still collecting quarterly dividend payments many of the 300 or so banks that are still participating in the program.
Even JPMorgan Chase (JPM) CEO Jamie Dimon said in his
"We did not at that point need Tarp," said Dimon, referring to the 2008 meeting in which Paulson called together the CEOs of the 10 largest bank holding companies asking them to accept the government's aid. "We were asked to because we were told, I think correctly so, that if the nine banks there, and some may have needed it, take this Tarp we can get it to the — all these other banks and stop the system from going down."
In his speech Tuesday, though, Kovacevich dismissed any suggestion that Tarp was a success.
"The spin never ends in Washington, D.C.," he said.
