The Obama administration today is committing the same sin as the Bush administration during the 2008 financial crisis: it's being too soft on big banks and letting them push the envelope with risky business practices, said Neil Barofsky, a former special inspector general in charge of oversight of the Troubled Asset Relief Program known as TARP.

While the congressional approval of TARP in 2008 did bring the economy away from the edge of an abyss, it failed to deal with the problem that banks have become too big to fail, meaning if they threaten to go under, they jeopardize the financial system thus forcing the government to bail them out with taxpayer money.

Today's regulations designed to curb financial excess, including the Dodd–Frank Wall Street Reform and Consumer Protection Act, are making the same mistakes that TARP made by failing to address the long-term implications of too-big-to-fail banks.

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“It put a giant Band-Aid over very existing problems and one of the things Dodd-Frank promised to do, which was to end the era of too-big-to-fail and end the era of bank bailouts but that didn’t happen at all," Barofsky told Newsmax.TV in an exclusive interview.

"Ultimately that effort to break up the banks was beaten back by [Treasury Secretary] Tim Geithner, by the Obama administration and I think that leaves us in a place that is extremely dangerous and we’re really at risk for another financial crisis unless we do something beyond what we’ve already done and take on the largest banks and really make it so that we never need” to bail them back out again.

Barofsky has criticized Geithner for not doing enough to shrink the size and scope of big banks while head of the Federal Reserve Bank of New York during the 2008 financial crisis, claiming that Geithner and others caved to the interest of large financial institutions.

"I just ran into a brick wall," Barofsky said of his time at TARP. "It was just this sense that less was more when it came to oversight and transparency," said the author of "Bailout: An Inside Account of How Washington Abandoned Main Street While Rescuing Wall Street."

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"We ended up with a program that was very beneficial for the banks, very beneficial for the executives and their bonuses but did precious little to help all the other people that the TARP and the bailouts were supposed to help. It did not achieve its goal of putting money into Main Street and failed miserably at its goal of helping to protect home ownership and do something about the raging foreclosure crisis."

Today, scandals continue to plague the banking system, ranging from a $4.4 billion hedging loss at JPMorgan to a broader rate-fixing scandal involving the London Interbank Offered Rate (Libor), an interest rates used by banks when lending to one another.

Banks worldwide are being probed from keeping the rate artificially low to profit on trades and water down borrowing costs during the 2007-2009 financial crisis.

"The Libor scandal — where they take all these risks knowing that if the risks work out well they get to keep the money and if it fails and blows up, oh well the tax payer will bail them out — these are all the types of symptoms of a broken system that’s built on the assumption that the government will bail them out again and that assumption comes with size and interconnectedness," Barofsky said.

Editor's Note: Economist Unapologetically Calls Out Bernanke, Obama for Mishandling Economy. See What They Did

"And when we as a country took that problem and made it worse instead of made it better, we’re just asking ourselves for this continued series of scandals that ultimately, at the end of the day, will not be paid for by the banks but will be paid by you, me, and everyone else who pays their taxes every April 15."

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