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
- Log in to post comments