Our guest blogger is David Min, Associate Director for Financial Markets Policy at the Center for American Progress Action Fund.

State Street Bank announced today that it would issue $1.5 billion in new stock, with the proceeds intended to be used to repay the $2 billion in preferred stock and warrants it issued the government under the terms of the Troubled Asset Relief Program. State Street is just the latest bank (joining Goldman Sachs, Morgan Stanley, JP Morgan Chase, and others) to announce its intention to try to exit the TARP program, which imposes some additional requirements on banks, including executive compensation caps and additional reporting requirements. However, with forecasters predicting additional downpours, it’s too early to pull back the TARP.

Even if we wish away the myriad criticisms about the results of the stress tests, including reports that banks were able to negotiate their results with the regulators, it’s not clear to me that we should allow the banks deemed “healthy” by the stress tests to so easily escape the additional oversight requirements that have been imposed on them in exchange for their participation in TARP.

Instead, the true test for whether banks are healthy enough to stand on their own should be that they can survive without access to the $12 trillion “alphabet soup” of federal subsidies, guarantees, and cheap financing that is currently providing easy profits for the financial sector. We should not be defining “healthy” banks as those that can “earn their way out of trouble,” when those earnings are entirely subsidized by the taxpayer.

At a bare minimum, banks seeking to opt out of the TARP oversight regime by repaying their TARP obligations should also be forced to opt out of the FDIC’s Temporary Liquidity Guarantee Program, which provides an explicit government guarantee on senior bank bonds (the FDIC ordinarily only guarantees deposits, and in return for this, they have extensive regulatory powers over the risks being taken by banks with these deposited funds), and a number of Fed programs which provided subsidized financing to troubled banks, secured by distressed assets such as toxic MBS and CDOs.

The principle governing banks right now ought to be this: if the taxpayer is helping you out, then you can’t opt out of the relatively minor restrictions imposed by TARP oversight. And the other side of the coin is this: if you want to opt out of those TARP oversight restrictions, then you also need to stop taking taxpayer money, both from TARP and elsewhere.

The Financial Times reported today that Congress plans to make June the month in which the future of financial regulation will begin to take shape:

Congress will next month start the biggest regulatory overhaul of the US financial system in decades, bringing into the open a frantic lobbying effort between banks, regulators and policymakers on what it contains and who pays for it…Details of the regulatory overhaul – which also includes increased supervision of the retail market for financial products, standardising rules governing deposit taking institutions and increasing oversight of over-the-counter derivatives – are still being debated.

Of course, most of the effort is going to focus on systemic risk regulation and a new resolution authority for taking over and breaking down large, complex firms, as well as figuring out what to do with derivatives like credit default swaps. But another idea that has been percolating is making the stress tests — which were just performed on the nation’s 19 largest banks — a permanent feature of the regulatory regime. Time’s Stephen Gandel laid out some of the case today:

In good times and bad, bank regulators are supposed to be probing financial firms to see if they hold adequate capital for the loans they make…But unless you are a bank examiner or some other industry insider, those so-called call reports are nearly impossible to read and understand.

What was different about the recent stress tests was that unlike the usual bank-by-bank examinations, the stress tests looked at all the banks as a group…The stress tests also looked out two years, instead of the usual one, as regulators gauged if banks could weather a worsening of the economy — where the stress in the name comes from — and not just whether they had enough capital to pay for current losses. Most importantly, the results of the stress tests were publicized and presented in a way that was easy for most people to understand.

And as Sebastion Mallaby pointed out, “if a bank blows itself up, it can take others down with it, damaging the economy and handing taxpayers the bill. So government has a duty to force banks to plan for bad scenarios.”

Of course, designing the tests in a way that actually puts the banks through a bit of stress and doesn’t allow for intense lobbying regarding the results would need to happen. The first series of tests seems to have been aimed as much at quelling fear as at actually assessing the strength of the banks. But in theory, the idea of periodically assessing the ability of the financial system to weather an economic downturn seems like an eminently sensible one.

The Washington Post ran an article today laying out in excruciating detail how expensive it is to be poor. As reporter DeNeen Brown put it, “the poorer you are, the more things cost. More in money, time, hassle, exhaustion, menace.” And by far, the most striking problem to me was the extra costs associated with buying food. Consider:

You don’t have a car to get to a supermarket, much less to Costco or Trader Joe’s, where the middle class goes to save money. You don’t have three hours to take the bus. So you buy groceries at the corner store, where a gallon of milk costs an extra dollar. A loaf of bread there costs you $2.99 for white. For wheat, it’s $3.79. The clerk behind the counter tells you the gallon of leaking milk in the bottom of the back cooler is $4.99….The milk is beneath the shelf that holds beef bologna for $3.79. A pound of butter sells for $4.49…(At a Safeway on Bradley Boulevard in Bethesda, the wheat bread costs $1.19, and white bread is on sale for $1. A gallon of milk costs $3.49 — $2.99 if you buy two gallons. A pound of butter is $2.49. Beef bologna is on sale, two packages for $5.)

That will add up to a lot of money pretty quickly, especially if buying food for children is involved. PolicyLink has found that wealthy neighborhoods have “three times as many supermarkets as low-wealth neighborhoods,” and “prices at the corner stores that dot inner city neighborhoods …can be much as 49 percent higher than those of supermarkets, for a limited selection of canned and processed foods and very little, if any, fresh meat and produce.” So people in low income neighborhoods are paying much more money for far lousier food.

It’s actually in our economic interest to increase access to healthier food. For one thing, inadequate nutrition means less healthy people, which drives up health care costs. Second, studies have found that students from households with inadequate food have lower math scores and are more likely to have repeated a grade. Children who experience hunger are twice as likely to receive special education services as children who do not. This chips away at our human capital.

New York City has done some good work with providing tax incentives for supermarkets to move into low-income neighborhoods and with encouraging community gardening and the proliferation of farmer’s markets. If more cities initiated programs like these, that would be an excellent start to reversing what right now looks like a terribly vicious cycle of poverty, malnutrition, and economic immobility.