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In the brief 150-page report file — complete with supplemental views and an exhaustive run-down on correspondence (at times lack thereof) with the Treasury — the COP stressed that historical lessons show the most effective response to banking crises has involved a combination of ousting “failed management” and liquidating banks. The April report scrutinizes the Treasury’s responses in these areas, its general view of the causes of the crisis and how effectively it has implemented its goals in dealing with the crisis.
The COP found that through “an array of programs” within the TARP, in concert with the Federal Reserve’s efforts on the secondary securitization markets side, the Treasury has spent or committed $590.4 billion. That’s after the adjustment for expected spending through the Capital Purchase Program from $250 billion to $218 billion. The total value of all spending, loans, and guarantees — including those at the FDIC, Treasury and FED — has topped $4 trillion, COP said. But simply throwing billions of dollars around will not resolve financial crisis, as the April report went on to illustrate four “critical elements” to any resolution strategy: transparency, assertiveness, accountability and clarity.
COP members described assertiveness as a “willingness to take aggressive action to address failing financial institutions by (1) taking early aggressive action to improve capital ratios of banks that can be rescued, and (2) shutting down those banks that are irreparably insolvent.” Accountability, panel members wrote, implies a “willingness to hold management accountable by replacing – and, in cases of criminal conduct, prosecuting – failed managers,” while clarity in the Treasury’s strategy will help consumers and investors know what to expect, bolster confidence in the system and encourage open communication with the administration.
full report:
http://cop.senate.gov/
Elizabeth Warren - Chair
Rep. Jeb Hensarling
Richard Neiman
Damon Silvers
John Sununu
The April oversight report for COP is entitled Assessing Treasury’s Strategy: Six Months of TARP.
In the brief 150-page report file — complete with supplemental views and an exhaustive run-down on correspondence (at times lack thereof) with the Treasury — the COP stressed that historical lessons show the most effective response to banking crises has involved a combination of ousting “failed management” and liquidating banks. The April report scrutinizes the Treasury’s responses in these areas, its general view of the causes of the crisis and how effectively it has implemented its goals in dealing with the crisis.
The COP found that through “an array of programs” within the TARP, in concert with the Federal Reserve’s efforts on the secondary securitization markets side, the Treasury has spent or committed $590.4 billion. That’s after the adjustment for expected spending through the Capital Purchase Program from $250 billion to $218 billion. The total value of all spending, loans, and guarantees — including those at the FDIC, Treasury and FED — has topped $4 trillion, COP said. But simply throwing billions of dollars around will not resolve financial crisis, as the April report went on to illustrate four “critical elements” to any resolution strategy: transparency, assertiveness, accountability and clarity.
COP members described assertiveness as a “willingness to take aggressive action to address failing financial institutions by (1) taking early aggressive action to improve capital ratios of banks that can be rescued, and (2) shutting down those banks that are irreparably insolvent.” Accountability, panel members wrote, implies a “willingness to hold management accountable by replacing – and, in cases of criminal conduct, prosecuting – failed managers,” while clarity in the Treasury’s strategy will help consumers and investors know what to expect, bolster confidence in the system and encourage open communication with the administration.
full report:
http://cop.senate.gov/
Elizabeth Warren - Chair
Rep. Jeb Hensarling
Richard Neiman
Damon Silvers
John Sununu
The April oversight report for COP is entitled Assessing Treasury’s Strategy: Six Months of TARP.
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