A growing number of banks are seeking to return or avoid government bailout funds because of the lengthening list of conditions attached to the money, the New York Times reports. Critics say the terms—including modification of mortgages and caps on executive pay—smack of economic engineering. Bankers are especially worried about the administration's ability to add more conditions at will.
The administration says that public outrage over the size of the bailout warrants the heavy oversight—but some experts believe it could backfire. If the healthier banks withdraw from the program, analysts say, the government will have to rely on weak banks to carry out its economic and social policies, keeping them afloat when it would likely cost taxpayers less to let them fail.