The Treasury Department's efforts to contain the financial crisis have succeeded in preventing an economic meltdown, but it must maintain its flexibility in order to deal with the period ahead, a government oversight panel said.
In a quarterly report to Congress, the Financial Stability Oversight Board said that Treasury's actions under the Emergency Economic Stabilization Act had positive effect on short-term consumer lending and long-term mortgage markets.
So far, Treasury has committed up to $700 billion for a myriad of programs to inject capital into the banking system by guaranteeing loans, packaging toxic assets and buying banking stock. The Federal Reserve has contributed by keeping interest rates low .
Flexibility going forward will assure that these successes continue, the panel said. Critics have chastised the program as a handout to Wall Street bankers and have said that the numerous programs under the EESA umbrella suggest policy fecklessness.
The oversight board also reported that the government was in a position to take "substantial" ownership positions of some of the banks it bailed out under the Troubled Asset Relief Program.
But it said that Treasury was committed to "keeping the period of government ownership as temporary as possible" and would used "reasonable efforts" to sell at least 20 percent of any common equity it acquires each year.
In a quarterly report to Congress, the Financial Stability Oversight Board said that Treasury's actions under the Emergency Economic Stabilization Act had positive effect on short-term consumer lending and long-term mortgage markets.
So far, Treasury has committed up to $700 billion for a myriad of programs to inject capital into the banking system by guaranteeing loans, packaging toxic assets and buying banking stock. The Federal Reserve has contributed by keeping interest rates low .
Flexibility going forward will assure that these successes continue, the panel said. Critics have chastised the program as a handout to Wall Street bankers and have said that the numerous programs under the EESA umbrella suggest policy fecklessness.
The oversight board also reported that the government was in a position to take "substantial" ownership positions of some of the banks it bailed out under the Troubled Asset Relief Program.
But it said that Treasury was committed to "keeping the period of government ownership as temporary as possible" and would used "reasonable efforts" to sell at least 20 percent of any common equity it acquires each year.
published April 27, 2009, 0 Comments
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