Institutions and their leaders that survived the financial crisis through government bailouts are encouraged to pursue the same sort of behavior that could trigger the next financial crisis, the Special Inspector General for the Troubled Asset Relief Program said in a report due to Congress Wednesday. But even if regulators can successfully implement strong enough provisions under the Dodd-Frank Act to thwart companies growing “too big to fail,” the ultimate success of the legislation will ultimately hinge on market perception, according to the report. “As long as the relevant actors (executives, rating agencies, creditors and counterparties) believe there will be a bailout, the problems of “too big to fail” will almost certainly persist,” SIGTARP said. TARP, which was created under the Bush administration in 2008, was thought to cost taxpayers as much as $341 billion in August 2009, according to the estimates from the Office of Management and Budget. That ultimate cost shrunk to a Congressional Budget Office estimate of $25 billion in November 2010. SIGTARP even said the TARP may break even or profit on the American International Group‘s recapitalization plan. Still, though, $160 billion in TARP funding has yet to be paid back, and the Fannie Mae and Freddie Mac price tag continues to grow. SIGTARP said the bailout’s most significant legacy will be the historic moral hazard and the “potentially disastrous” effects from institutions that continue to be “too big to fail.” Kansas City Federal Reserve Bank President Thomas Hoenig reported in December that the five largest financial institutions have grown 20% since TARP was enacted. Even more staggering, these companies control $8.6 trillion in financial assets, the equivalent to 60% of the gross domestic product. Speaking before the Congressional Oversight Panel in June 2010, Treasury Department Secretary Timothy Geithner said the reforms passed in July will end “too big to fail.” Dodd-Frank created a Financial Oversight Stability Council that gives regulators the ability to supervise and oversee any bank deemed a systemic risk to the economy. Dodd-Frank also gives the Federal Deposit Insurance Corp. the authority to develop how these financial giants could be wound down. These “living wills” will be designed to assist in the orderly liquidation of any company that threatens the overall system. “Thus far, the Dodd-Frank Act appears not to have solved the perception problem,” SIGTARP concluded. “The largest institutions continue to enjoy access to cheaper credit based on the existence of the implicit government guarantee against failure. … The ultimate cost of TARP will remain unknown until the next financial crisis occurs.” Write to Jon Prior. Follow him on Twitter: @JonAPrior