The big names in banking, including most leading Wall Street firms, made headlines last year by recording record profits and repaying much of the TARP (Trouble Asset Relief Program) money they received as part of the federal government's bailout of the financial industry. The motivation for quickly returning the TARP money was, at least partly, to escape the executive pay restrictions imposed on recipients of bailout funds.

But despite returning much of the TARP money, the bailout of Wall Street and the biggest U.S. commercial banks continues — courtesy of the Federal Reserve's extremely low interest rates.

An article in the current issue of BusinessWeek magazine notes that "Low interest rates have been hell on savers — and heaven for banks." The article explains that U.S. banks made an extra $56 billion in interest income since the Fed's dramatic interest rate cuts. The article's author noted the ironic reality by saying, "Banks are getting a pretty sweet deal for nearly blowing up the financial system."

The low interest rates charged banks for borrowing from the Fed make it easy to profit from most of their investment activity, including simply buying Treasury bonds paying about 3 percent.

In addition to having access to no-cost funds from the Federal Reserve, banks have attracted plenty of deposits from investors nervous about volatile stock markets. Those investors have moved more than $500 billion to banks where deposits are federally insured, but where interest on savings accounts had been slashed to 1 percent or less. Again, banks have plenty of cheap money to invest.

And, while banks have taken advantage of essentially free money to make big profits on bond trading and some of the same sort of exotic investments that helped bring about the financial crisis, they also have been making billions of dollars from their customers by hitting them with fees for credit card and debit card use, as well as jacking up minimum payments and interest rates on card balances.

Given this environment, it's no wonder that some of the big banks recorded record profits in 2009 — and paid out stock bonuses worth billions of dollars to top executives.

The BusinessWeek article quoted a finance professor at Louisiana State University, who said, "We are all funding the bailouts, whether we want to or not, both as taxpayers and depositors."

Given these circumstances, it's troubling to note that the financial institutions that required hundreds of billions of dollars in taxpayer money to be rescued from collapse because they were deemed "too big to fail" are now even bigger. And these giant banks no doubt know that the taxpayers and federal government will still stand behind them, regardless of the risks they take.

And as added insurance, the financial industry spends hundreds of millions of dollars lobbying and making campaign contributions to powerful members of Congress.

President Barack Obama seems to run hot and cold on getting tough on banks, one day expressing disdain for "fat cats on Wall Street" and the next day having a friendly chat with those same bankers at the White House. In an encouraging move last month, Obama proposed a targeted tax on the nation's biggest banks designed to ensure that all of the TARP money is repaid, including the $182 billion spent to bail out American International Group (AIG) that is not expected to be repaid by AIG. Since leading Wall Street investment banks were indirect beneficiaries of the AIG bailout, it is appropriate that those same companies pay back the AIG bailout money through a new fee, which is designed to hit only the largest banks and also is intended to discourage excessive risk-taking by the big banks.

The new fee proposed by Obama is appropriate because the financial industry continues to profit from a bailout courtesy of the federal government and taxpayers. If the fee can be targeted in such a way that it discourages future risky investments, so much the better. But none of this is a substitute for meaningful reform of the broader financial industry to address the "too big to fail" issue and dealing with the fact that the financial industry played a major role in causing the economic crisis still being felt around the world.

As obvious as is the need for serious financial reform, Wall Street's political influence in Washington is unmatched. And those well-connected lobbyists and campaign contributors will work to water down or defeat any obstacles to billion-dollar profits and million-dollar bonuses based on taking big risks. Time will tell whether Sen. Dick Durbin, D-Ill., was correct when he commented on Wall Street's influence in Congress, saying, "They frankly own the place."