What is wrong with the U.S. Treasury’s troubled asset relief program (TARP)? Quite a lot, judging from two reports on the program. Both Government Accountability Office (GAO – always at the top of my annual Top 10 Best Government Agencies List) and a Congressional Oversight Panel (COP) for “economic stabilization.”

While it’s tempting to click into coy headline writing mode (“COP Busts TARP” and “Is TARP Troubled?” come to mind), the questions these reports raise are sobering. Here’s the GAO’s report.

The oversight panel report, in fact, asks 10 tough questions, including this one: What have financial institutions done with the taxpayers’ money received so far?

Well, the banks are hoarding it. Someone who has spoken to top executives at several of the world’s largest banks, told me as much a few weeks ago:

“There is a lot of hoarding of cash,” he said, “and I think the $700 billion bailout is going to be hoarded. This statement was made to me: ‘We (banks) don’t see our primary goal as making sure that everybody has money. Our primary goal is to survive. If you give us money we’re going to use it to survive. I also heard someone say this: I’d rather use money given to me to buy another bank than to do risky loans.”

As my source concluded, “That’s not exactly why we’re putting billions or trillions into banks.”

And that’s exactly why the GAO and COP reports appeared and warrant consideration and a response.