Did government officials lie to us about the health of the first nine banks to receive TARP funds. Apparently so, according to Neil Barofsky, the special inspector general for TARP. He has concluded that "despite multiple statements to the contrary federal officials had concerns about the health of several of the nine institutions at that time and, as detailed in this report, that their overall selection "was far more a result of the officials' belief in their importance to a system that was viewed as being vulnerable to collapse than concerns about their individual health and viability."

It seems like a gray area. You could see some gradations whereby the concern was with the future health of the banks, if trends continued. You can't really fault regulators for not wanting to stoke any panic, by suggesting that these banks were on the brink of failure. Then again, it does seem like the message could have been finessed a bit. All in all, I doubt this will amount to a major tempest. 

For more:
- here's an ABCNews article

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