Rather than unfreezing the credit markets, regulations that come with the deals will stifle business and perpetuate the crisis, according to some industry insiders.
Foreclosure Warehouse, an online inventory of foreclosed homes for sale, has said the government funds include too many restrictions and controls on how banks should conduct their business.
"Every time the U.S. government gets involved with something, whatever it is becomes slower, costs more, and satisfies less," the company has said in a statement.
It also added that keeping insolvent banks in business further weakens the financial system.
The company has added its voice to the ongoing debate about the merits of the bank rescue plan and the scope as well as extent of banking sector reforms.
The administration’s actions, including the economic stimulus bill that will cost over $1 trillion and several rounds of financial institutions bailouts, have attracted much criticism.
Recently, former Speaker of the House Newt Gingrich called on the government to return to capitalism’s basics by allowing failed companies to go into bankruptcy instead of pumping taxpayers’ money in to keep them afloat.