Warren Report is out

The report by Prof. Elizabeth Warren heading the Congressional Oversight Panel for the TARP loans to large US banks is out.

Report is at cop.senate.gov (151 p. pdf)]

It makes interesting reading.
Section C has a discussion of European handling of the current crisis, with C.1 providing a succinct discussion of Iceland.

Section D is on the way forward.

Short version:

  • Transparency: swift action to ensure integrity
  • Assertiveness: willingness to take aggressive action ...
    2) shutting down those banks that are irreparably insolvent
  • Accountability: willingess to hold management accountable and prevent excessive risk-taking in the future
    build public trust, prosecute criminal conduct
  • Clarity

Treasury plan may work and US gets out of this with little or no govt losses, or even some profit, if economy bounces back quickly and everything goes back to as it was,
ie if this is a "normal quick-dip recession"

If not, it won't work, and something else is needed.
US Treasury expectations are optimistic.

Oh, we are so screwed...

The appendices are worth dipping into, especially Geithner's letter in App. I.

Read section 3 where the US Treasury is slammed for non-co-operation, the COP was excluded from the PPIP details and the TALF and has not got the information they requested about AIG.

Geithner will appear before the COPs on April 21st. Sounds like there might be fireworks.

At a quick glance, it sounds like Geithner thinks it is now all about risk, and the unwillingness of banks to take any; and that the solution is to guarantee their private profits and socialize the risks.
Hoocoodanode?

The Federal Reserve point-by-point response to the COP detailed queries, in Appendix II, is, appropriately enough, dated April 1st.
Someone there has a sense of humour.

You will be happy to know that the Fed Reserve is deeply committed to all sorts of good things, although they are a little bit short on specifics as to how exactly they propose to bring various good things about...

Next report in May.

h/t TPM

Tags

More like this

Following the market? Intrigued by the collapse of investment banks? Huh! You wot? The words of the month are: Hoocoodanode? and "privatize the profit, socialize the risk" Blog finance nerds anticipation - look at the comments Athenae's rant at First Draft is a thing of cathartic beauty Steve…
One of the goals of several of the federal interventions was to keep subprime loans high. If the prices for these loans dropped too much, then the banks holding these loans would be insolvent (loans are counted as assets under the assumption that they will be paid back)--the amount of money they…
Yves Smith lays out just how stupid Treasury Secretary Geithner's proposal is. I think these are the key points (italics mine): Let's start with the basics. The US banking system is insolvent. Got that? Insolvent. That does not mean every bank in the US is toast, in fact quite a few are probably…
The reason the AIG bonuses are upsetting isn't the amount of the bonuses--although the bonuses are larger than the entire National Endowment for the Arts budget--it's the complete impotence of and cooptation of the government by the financial sector (yes, we need banks and a financial sector, but…