“People are looking for accountability,” said Cornelius Hurley, Director of the Morin Center for Banking and Financial Law at Boston University. “There is enormous frustration at the lack of indictments. We have all seen crises much smaller than this where people went out in handcuffs.”

For the past three years, these same banking executives have been hauling in $10 million bonuses while selling the high-risk loans that taxpayers are now being forced to bail out, said Hurley.

“We need to get that money back,” he said. “I believe executives of those institutions should be required to submit to third-party review of their bonuses in order to continue in their jobs. The rallying cry should be ‘Give it back or get out.’”

The panel was moderated by Alasdair Roberts, the Jerome L. Rappaport Professor of Law and Public Policy at Suffolk Law School.

Former Massachusetts Attorney General Scott Harshbarger, now a private attorney, took an even dimmer view of the first phase of the bailout, asserting that the federal government “failed big” because of the complete absence of oversight. He linked the response to “air-dropping cash to the Afghan tribal chiefs and saying, ‘We hope you use this money to stabilize the country.’ We have no idea how the banking institutions have used the first $300 billion.”

Some panelists emphasized that the Treasury Department did an admirable job in slowing a financial avalanche that was building enough momentum to exceed the damage done by the Great Depression.

“I think it was a good idea to rescue the financial institutions,” said Damon Silvers, of the federal Troubled Asset Relief Program (TARP) Oversight Panel and an attorney for the AFL-CIO. “We were faced with an extraordinary danger, and a revenue infusion was the right way to go. It didn’t solve the systemic problems, but it did get the situation stabilized.”

He said that adequate oversight was virtually impossible due to the speed of the meltdown; on the day his oversight panel began work it had no office, no staff and a report that already was 10 days overdue.

“We were forced to operate very much in the manner of someone repairing a car while they are driving it,” he said.

Robert Hoyt, former general counsel to the Treasury Department, said that in September his department was scrambling to deal with a situation where a new major financial institution was announcing disaster every two days – a chain of events that culminated at the end of the month in the largest single bank failure in U.S. history.

“First and foremost, we had to bring stability to financial markets that were on the verge of a collapse that would have been worse than the Great Depression,” said Hoyt.

Noting that only 20 percent of the bad loans were given out by traditional banks, Silvers said the crisis was created by unregulated lenders such as credit card companies, mortgage brokers, and companies that borrow directly from capital markets.

“If you don’t regulate the shadow markets, you have done nothing,” he said. “We allowed the shadow markets to grow to the point where they swallowed up our financial system.”

According to Hurley, the largest continued threat to our financial system comes from the so-called “systemic risk” institutions – entities so massive that, if they were allowed to fail, would bring the whole system down with them.

“If there is anything that has failed in this crisis, it’s the too-big-to-fail policy,” he said. “We have created a system of institutions that are so big, complex, and interconnected that they cannot be managed. We need to establish an oversight system that can identify systemic-risk institutions before they are in trouble.”

However, because these institutions cannot be allowed to fail, they have a huge advantage over their competitors in the lending market. Hurley said this lending differential should be taxed as a form of insurance premium, thereby ensuring that the profits from the lending advantage go back to the taxpayers rather than the investors.

This was the second Rappaport Center roundtable discussion on the financial crisis and the federal rescue plan. In October, Suffolk University faculty gathered with economic and financial experts from Washington and Boston, including Massachusetts Treasurer Tim Cahill, Commissioner Steven Antonakes of the state’s Division of Banks, and state Senator Marian Walsh.