How much can the new TARP chief accomplish?

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It's probably not news to most people who read the papers that Herb Allison, who currently runs Fannie Mae (FNM), is the Obama administration's choice to oversee the TARP. Now the choice is official and Allison can begin months of frustrating work that will probably offer little reward.

The TARP has a number of problems now, and a new boss will not solve them. At the top of that list is the committee appointed by Congress to be the watchdog in charge of tracking how the government's funds are used. It has been highly critical of the decision about how the money been spent and what it views as the almost total lack of accountability for tracking whether banks are using the capital as intended. Allison almost certainly will spend a good deal of time defending decisions that Congress believes favor the banks but not bank customers who need loans.

The bigger problem is that the TARP is low on money. According to The Wall Street Journal, "Mr. Allison's nomination comes as the White House wraps up its bank stress tests, the results of which are expected early next month. The Obama administration also may have to return to lawmakers to seek additional rescue funds, a process in which Mr. Allison would likely play a large role."

Congress appears to be hostile toward giving banks more capital and does not want to be held responsible by voters for throwing more money into a system that does not appear to have done much to help the economy or the availability of credit of the housing crisis.

Mr. Allison may as well stay home. There is not much he will be able to accomplish in his new office.

Douglas A. McIntyre is an editor at 24/7 Wall St.

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