A congressional panel overseeing the U.S. financial rescue has released a report entitled Assessing Treasury’s Strategy: Six Months of TARP, where it offers a preliminary look at Treasury’s strategy and offers analysis on the current banking crises. The report suggests that getting rid of top executives and liquidating problem banks may be a better way to solve the economic crisis.
“All successful efforts to address bank crises have involved the combination of moving aside failed management and getting control of the process of valuing bank balance sheets,” the panel, headed by Harvard Law School Professor Elizabeth Warren, said in its report.
The report also said that the Treasury may be relying on too rosy an economic scenario to guide its $700 billion bailout, and declared that the success of the program after six months is “mixed.”
According to the report, the total value of all direct spending, loans and guarantees provided to date in conjunction with the financial stability efforts (including those of the FDIC as well as the Treasury and the Federal Reserve) now exceeds $4 trillion.
Prof. Warren, in an interview on Bloomberg Television, said yesterday that while “things may be getting a little better” under Geithner, the Treasury still needs to be more transparent about how it is spending the taxpayers’ money. “We still have a long way to go, a very long way,” she said. [via Bloomberg]
More on Prof. Warren’s views: