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Nov-07-2009US Should Give More Detail on Guarantee, Panel Says(topic overview)
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Federal government guarantees to back up bank assets during the financial crisis posed a "considerable risk to taxpayers" last year, but the guarantees ultimately played "a significant role" in calming the markets, and now taxpayers appear set to earn a profit, a government watchdog panel said Friday. The Congressional Oversight Panel reports that the government will rake in revenue in fees from its guarantees on bank assets. In a new report released Friday, the Congressional Oversight Panel said that at its peak the federal government ''' through the Treasury Department, the Federal Reserve, and the Federal Deposit Insurance Corporation ''' was guaranteeing $4.3 trillion in face value of bank assets, making it the single largest part of the government's response to the crisis. [1] WASHINGTON -(Dow Jones)- The U.S. government is likely to make a profit on trillions of dollars in guarantees made during the height of the financial crisis, though such arrangements do expose taxpayers to significant risk, a watchdog said Friday. The Congressional Oversight Panel for the Treasury Department's $700 billion Troubled Asset Relief Program said in a report that at its zenith, the government was guaranteeing or insuring $4.3 trillion in financial assets in three programs run by the Treasury, Federal Reserve and Federal Deposit Insurance Corp. Through these programs, the report said, "taxpayers bore a significant amount of risk," but it may have been worth it: the panel found that it is likely the government will receive more in fees and other revenue than will be paid out through the guarantees.[2]
WASHINGTON (Reuters) - The U.S. government guaranteed as much as $4.3 trillion in financial assets last year, making such backstops the biggest and riskiest part of Washington's response to the financial crisis, a bailout watchdog panel said on Friday. The Congressional Oversight Panel said in its latest monthly report that the asset guarantees from the U.S. Treasury, the Federal Reserve and the Federal Deposit Insurance Corp helped calm panic in financial markets at minimal cost to taxpayers so far.[3]
We get out of it OK but the world will never look the same again," said Warren, who is also a professor at Harvard Law School. The nominal value of guarantees surrounding the TARP program was $4.3 trillion, even though the TARP itself was limited to $700 billion, and that "tells us how much influence it can have on the market," she said. "That distorts prices in the market and creates moral hazard." The good news is that the asset guarantees from the Treasury, the Federal Reserve and the Federal Deposit Insurance Corporation helped calm panic in financial markets at minimal cost to taxpayers, she said. The government has indicated it will race in whenever there is a major crisis, she said.[4]
The Congressional Oversight Panel has''issued its latest report ''on how the government's huge bailout of the financial system is going. The most startling part of the document is that it describes the federal government's $4.5 trillion guarantee of financial assets which put huge sums of taxpayer money at risk and, according to the panel, created a significant "moral hazard" which could encourage banks to return to risky behavior in anticipation that the government will always provide them with a safety net. The panel has good things to say about the Treasury's recent reaction to the credit crisis because its analysis of the department's actions point to an aggressive attempt to get taxpayer money back from the financial firms which got federal support. Its analysis shows that the only program which has lost a great deal of money so far is the FDIC. It remains''to be''seen how money put into the country's largest banks will do.[5] Some have estimated that the government was once on the hook for $4.3 trillion worth of guarantees for insuring money market funds, financial firms''' debt, and other assets owned by Citi and Bank of America. The panel wrote, '''In light of these guarantees''' extraordinary scale and their risk to taxpayers, the panel believes these programs should be subject to extraordinary transparency.''' The report also said that the treasury should provide taxpayers with information about the make-up of Citibank'''s guarantee asset pool, its losses and future projected losses.[6] Among other programs reviewed in the report, the FDIC debt guarantee program currently backstops about $307 billion in outstanding obligations. The watchdog panel said it did not identify any significant flaws in the Treasury's implementation of its programs and noted that Treasury has taken a more aggressive stance in safeguarding taxpayer funds. It recommended that the Treasury disclose more information on the rationale and justifications for creating the money market guarantee program, and explanations of why Citigroup and Bank of America were the only institutions selected for asset guarantee protection. It also asked for more updates on the pool of Citigroup assets, now estimated at $266.4 billion, including total and projected losses.[3] Treasury should also provide reports of the total number of money market funds participating in the program, or the total dollar value guaranteed, for each month that the program was in existence. The Panel also recommends that the MOUs with Citigroup and Bank of America, and the MOU with any other institution relevant to this report on the AGP and other TARP-related guarantees, be provided to the Panel to inform its oversight functions, to be used subject to applicable legal protections. The Panel recommends that Treasury provide regular disclosures relating to the guarantee of Citigroup assets under the AGP, including the final composition of the asset pool (as reflected on Schedule A to the Master Agreement) and total asset pool losses to date, as well as projected losses of the pool, and how these estimates have been calculated. Based on this report by the Congressional Oversight Panel, it is clear that TARP succeeded in restoring confidence in the markets.[7]
The Congressional Oversight Panel released a report saying that the U.S. treasury should provide regular reports about losses from the $301 billion worth of assets that the federal government agreed to guarantee for Citibank (NYSE: C) last year in an attempt to prevent the bank'''s collapse. In the report, the Congressional Oversight Panel, said such guarantees '''carry considerable risk to taxpayers.'''[6]
The panel, charged with overseeing the U.S. Treasury's $700 billion Troubled Asset Relief Program, said that as financial markets stabilize and the scope of the guarantee programs decrease, the likelihood of major expenditures also diminishes. "This apparently positive outcome, however, was achieved at the price of a significant amount of risk," the panel said in the report.[3]
Treasury spokesman Meg Reilly said the department is pleased with the report's conclusion that the insurance programs stabilized financial markets and have produced some returns for taxpayers — including $1.2 billion from the now-expired guarantees on money market mutual funds. She said in a statement that Treasury has "worked continuously with the oversight bodies to improve transparency and implement constructive recommendations" around the financial stabilization programs.[8]
Elizabeth Warren, the Harvard Law School professor who heads the Congressional Oversight panel, said the guarantees also produced significant distortions in private markets, drawing funds to assets that had backstops. "The fact that there is no upfront cost is both the beauty and danger of guarantees," she told a conference call on the report. "They are perhaps too tempting." The majority of the $4.3 trillion that the government guaranteed came from a money market mutual fund guarantee program aimed at preventing massive withdrawals of such funds in the fall of 2008. At its height, the program guaranteed $3.217 trillion in money market fund assets.[3] At the height of the program, the federal government (and ultimately U.S. taxpayers) guaranteed or insured $4.5 trillion in face value assets, with the majority of the guarantees backing money market accounts that held high concentrations of government debt in the form of Treasury securities.[7]
Insuring bank deposits did not attract the same scrutiny as the higher-profile capital injections that came directly from the $700 billion fund. That meant there was relatively little discussion about their unintended negative consequences: invisible, permanent subsidies to banks and price distortion in many parts of the market. When a major money market mutual fund threatened to "break the buck" last year, the Treasury Department temporarily guaranteed its assets to reassure investors that their money was safe. The actions spared investors the downside of their risk while allowing them to earn better returns than they would have in a normal deposit account.[8] The other big beneficiaries were Citigroup, Bank of America, JPMorgan Chase, Morgan Stanley and Wells Fargo. The savings came in the form of federal guarantees on more than $300 billion of bonds issued by banks and other financial institutions, and they were merely one component of a $4.3 trillion safety net of guarantees orchestrated last year by the Treasury Department, Federal Reserve and Federal Deposit Insurance Corporation.[9] The panel makes periodic assessments of how Treasury is managing the $700 billion financial bailout Congress approved last year. Guarantees "put more power in the hands" of Treasury and the Federal Deposit Insurance Corp. because "they're not limited by the number of dollars Congress will authorize," panel chairwoman Elizabeth Warren said in a call with reporters.[8]
In one of the first systematic efforts to analyze the maze of guarantees and hidden subsidies, the Congressional panel that oversees the Treasury'''s $700 billion rescue program said the guarantees had provided a cheap but risky tactic for fighting the financial crisis last year.[9]
The panel stated: "While it may be understandable that much of the government's reaction to the financial crisis was based on expediency rather than clear and transparent principles, the result is that government intervention has caused confusion and muddled expectations. Extraordinary transparency is necessary in order to determine the rationale behind the guarantee programs, and whether they have achieved their objectives." The Panel recommends that Treasury disclose the rationale behind the creation of guarantee programs, including a discussion of any alternatives, why those were not selected, a cost-benefit analysis of all options, and why Citigroup and Bank of America were the only institutions selected for asset guarantee protection. The Panel recommends that Treasury fully and publicly disclose its legal justification for creating the TGPMMF through the use of the Exchange Stabilization Fund.[7] At the height of the financial crisis late last year, the government provided guarantees to financial institutions, from money-market funds to expanded deposit-insurance for banks and $300 billion in troubled assets held by Citigroup.[9]
At the peak of the credit crisis in late 2008, the government stepped in to guarantee $300 billion in Citigroup assets with no immediate cost to taxpayers. Citigroup paid the government $7.3 billion in preferred stock for those guarantees.[10]
The Treasury Department leveraged limited bailout money to insure assets worth many times more. That allowed officials to risk far more taxpayer money than Congress intended, Warren said. "It's a very dangerous tool," she said. "It did well this time but we might not always be so lucky." She worried in particular about the low upfront cost of offering the guarantees, which she said makes the approach "tempting — perhaps too tempting — as a way to subsidize troubled financial institutions."[8] "A significant element of moral hazard has been injected into the financial system and a very large amount of money remains at risk." Elisabeth Warren (head of panel) noted, "The fact that there is no upfront cost is both the beauty and danger of guarantees," she told a conference call on the report. "They are perhaps too tempting." Both Republican and Democratic Administrations abused it: 1) No mention of the fact that former Treasury Secretary Paulson perverted the guidelines to put the biggest chunk of it in AIG so that AIG could pay off a $20 Billion contract with Goldman Sacks -- which saved Goldman -- of which Paulson had been CEO and held hugh stock options in. 2) Nor was there mention of the money diverted to the car companies (which were not financial institutions as defined in TARP) -- or the manipulations that stripped stockholders and bondholders of all rights and gave ownership of major portions of the companies to the UAW. Reply [7] Elizabeth Warren, director of the oversight panel, warned that the guarantees also exposed taxpayers to potentially huge costs and had created new risks by encouraging financial institutions to count on future bailouts and take bigger risks. '''The guarantees, when they work, provide big market stability at very low cost,''' Ms. Warren said. '''But they come with a very high risk to the taxpayer and a powerful distortion of market pricing and moral hazard.'''[9]
The good news for taxpayers, the panel said, is that the government had actually turned a profit thus far on the guarantees. The government has collected $9 billion in fees for guaranteeing bonds issued by the big financial institutions and a total of $17 billion in fees for all its emergency guarantees.[9]
According to a new report from the Congressional Oversight Panel, the $700 billion allocated to purchase or insure '''troubled assets''' under the Troubled Asset Relief Program (TARP) may turn out to reap profits, not losses.[10] The guarantees offered by the U.S. government to ensure the financial system does not collapse have changed the world forever because now expectations are that the same guarantees will be offered in major crises, Elizabeth Warren, the head of the Congressional Oversight panel on the Troubled Asset Relief Program (TARP), told CNBC Friday.[4] By issuing guarantees, the Treasury and federal agencies were able to leverage the TARP money to secure a larger pool of assets. The Congressional Oversight Panel concludes that the guarantees succeeded in their ultimate objective to free up frozen credit markets and halt the tailspin of the financial markets. Despite their advantages, the guarantees were also a high-risk gamble.[10]
"The panel has noted a trend towards a more aggressive and commercial stance on the part of Treasury in safeguarding the taxpayers' money," the report said. Such guarantees do raise issues for the government, including the potential for distorting financial markets because of participants' belief that such guarantees will always be in place.[2] The panel noted a "trend towards a more aggressive and commercial stance on the part of Treasury staff in safeguarding the taxpayers' money, evidenced, for example, in the apparently robust negotiation of the Bank of America termination fee." The panel recommends that this trend continue, but also wrote: "It should be noted, however, that this newly aggressive stance has a disproportionate effect on banks that remain governed by TARP, meaning that financial institutions that have already exited TARP have been treated more leniently."[7]
Panel member Rep. Jeb Hensarling, R-Tex., who voted to approve the report, warned in a separate statement that the subsidies "should not serve as a template for future bailouts." He said he was not convinced Treasury was within its rights to use bailout dollars to guarantee assets worth many times more, and said it is too early to say whether Treasury charged banks high enough fees to offset the risk borne by taxpayers.[8] The panel found that so far, the Treasury Department has collected $17.4 billion in fees and taken only up to $2 million in losses from the Debt Guarantee Program that backs the debt which banks issued.[7] The November 5 report notes that the income from the government guarantee programs issued under TARP and related programs will likely exceed the losses. Up to this point, the Treasury Department has received a total of $17.4 billion in fees for various TARP-related programs, while shouldering only $2 million in losses.[10]
Treasury spokeswoman, Meg Reilly, made a statement saying that the report '''correctly recognizes that Treasury'''s guarantee program for money-market mutual funds earned more than $1.2 billion in income for taxpayers, while helping to stabilize our financial system at a time of severe stress,''' Reilly continued, '''Treasury has now successfully closed the program with no losses.'''[6]
The Debt Guarantee Program (DGP), which currently guarantees a principal amount of $307 billion (plus interest) will diminish as of June 2012 with just $2 million expected in losses to date. The Asset Guarantee Program (AGP) has only one bank still using its guarantees: Citigroup ( C ).[7] The report said for program that once guaranteed a pool of $301 billion in Citigroup assets, initial actuarial estimates point toward a possible loss of $34.6 billion under a "moderate" stress scenario. Since Citigroup must absorb the first $39.5 billion in losses from these assets, taxpayers would not be liable for any of this.[3]
The report even suggested that federal guarantees on $300 billion in Citigroup Inc. (C) assets could result in a profit for taxpayers.[2]
When Congress authorized the $700 billion financial bailout plan last fall, it also gave government agencies the power to support the value of assets indirectly by issuing guarantees.[1] At the high point, the federal government was backing $4.3 trillion in face value of high-risk assets held by financial institutions teetering on the edge of bankruptcy.[10] At the peak of the financial crisis, taxpayer money guaranteed assets worth $4.3 trillion to help banks ride out the panic.[8]
In Citibank'''s case, the New York Bank paid the government $7.3 billion in preferred stock for the guarantees that were provided last November amidst the worst financial crisis since the great depression.[6] Kemper also estimated that the government stands to lose all of the $200 billion it invested, outside of TARP, in mortgage giants Fannie Mae and Freddie Mac. With the biggest losses occurring outside the banking system, Kemper says it's unfair that banks have become a "whipping boy" for problems in financial markets. "There is a myth and there's a reality of what the bailouts have meant," he said.[11] The programs, which essentially provided insurance against losses, helped stabilize financial markets but put far more taxpayer dollars at risk than Congress intended, according to the Congressional Oversight Panel.[8] The risky bets are back as are the fat bonuses courtesy of the expensive guarantee. Without risk, how cautious will Wall Street really be? A Congressional Oversight Panel is reviewing this issue though whether Congress will act is another question. "This apparently positive outcome, however, was achieved at the price of a significant amount of risk," the panel said in the report.[12]
My! What a "feel good" article! Reuters article, also posted on CNBC notes that actual government pledges were $4.3 TRILLION with much of that outside of the control of TARP and poorly accounted for. The oversight panel (quasi-auditor) for the TARP noted that "This apparently positive outcome, however, was achieved at the price of a significant amount of risk."[7] The added exposure was not for the full face value, since government debt is already backed by the full faith and credit of the U.S. government. The primary benefit of these guarantees was to restore faith in the U.S. financial marketplace. Essentially, with these guarantees the global marketplace knew "the American taxpayer would bear any price, absorb any loss, to avert a financial meltdown." Could the U.S. have actually made good on $4.5 trillion in guarantees? Probably not, and they carried great risk for U.S. taxpayers.[7] The risk noted by the panel is a "significant element of moral hazard," and a very large amount of money remains at risk, especially in the Debt Guarantee Program. "By limiting how much money investors can lose in a deal, a guarantee creates price distortion and can lead lenders to engage in riskier behavior than they otherwise would," the panel added.[7] The Oversight Panel noted that the Treasure had become more aggressive in safeguarding taxpayers''' money, but also recommends much greater transparency in disclosing the details of the guarantee programs and the rationale behind choosing one approach over another. The Panel lastly comments that government guarantees come with a significant downside: they create moral hazard by limiting the amount of money investors can lose and possibly tempting lenders to engage in riskier behavior than they otherwise would.[10]
The Congressional Oversight Panel conceded at the end of the day the guarantees will likely return a profit to the taxpayers because the government charges fees for the insurance and only pays if there'''s a loss.[6]
You may find it hard to believe, but the Congressional Oversight Panel released its monthly report Friday and said that it had found no "significant flaws in Treasury's implementation" of TARP bailout programs.[7] Good guess, Lita! We have become accustomed to the level of competence exhibited by the Congressional Oversight Committees in overseeing the various Agencies which Congress has established. It is easy to believe its Oversight Panel began its review with the conclusion that the Treasury Department was doing a good job and only looked for facts supporting that conclusion.[7]
The oversight panel said it found '''no significant flaws''' in how Treasury officials and banking regulators designed the guarantees. Ms. Warren warned that they were a '''dangerous tool,''' adding that '''next time we may not be so lucky.'''[9]
Though the panel pushed Treasury to be more transparent about guarantee programs, including detailed analysis of the Citigroup asset pools, investigators found no significant flaws in the implementation of the government guarantees.[2] "As Treasury contemplates an exit strategy. unwinding the implicit guarantee of government support is critical to ensuring an efficiently functioning marketplace," the report said. Rep. Jeb Hensarling (R., Tex.), said in a statement released by his office that the success of the government's guarantee programs may not be indicative of future performance.[2]
As of the report's release date, the government had collected $17.4 billion in fees from the guarantee programs, while only as much as $2 million was expected to be paid out to cover a default.[2] To date, the programs have generated fees of about $17.4 billion, while only up to $2 million is expected to be paid out for a default under the FDIC's bank debt guarantee program.[3]
A guarantee is essentially a promise by one party to back another party's obligation to a third party. It is similar to what the FDIC does by backing up bank deposits up to $250,000. If a bank fails and depositors cannot obtain their money, the FDIC, having guaranteed that debt, will step in and provide the funds.[1]
Friday's report says the deals reflect "a trend towards a more aggressive and commercial stance on the part of Treasury in safeguarding the taxpayers' money." It said "in light of these guarantees' extraordinary scale and their risk to taxpayers," Treasury should provide "extraordinary transparency," disclosing more details about how and why the guarantees were offered.[8] While the total taxpayer exposure was never $4.3 trillion, the panel warned that these guarantees posed "considerable risk to taxpayers.[1]
The key risk left is exiting from the program carefully so as not to destroy what TARP has done to calm the markets. Can the government cease to provide those massive guarantees and expect the banks to stand on their own? I'm not sure anyone is ready to answer that question.[7] "One of the most regrettable legacies of TARP is that the all-but-explicit government guarantee of financial institutions. has severed the link between risk and responsibility," Hensarling said.[2] According to the Panel, much of the benefits from TARP and related programs have come not so much from purchasing assets directly from troubled financial institutions, but from supporting the value of assets indirectly by issuing government-backed guarantees.[10] The government stepped in to rescue financial institutions deemed '''too big to fail,''' which included securing hundreds of billions of dollars in risky assets belonging to Citigroup and Bank of America.[10]
One of the federal government'''s most opaque methods for bailing out the banking system allowed a handful of giant institutions to save up to $25 billion on their borrowing costs, a Congressional panel estimated on Friday, Edmund L. Andrews writes in The New York Times. Seven companies received about 82 percent of those benefits, the panel estimated. General Electric Capital was able to reduce its borrowing costs by about $1.9 billion, while Goldman Sachs saved an estimated $606 million.[9] Of course, the big banks' ability to leave the intensive-care ward doesn't mean that the banking system is healed. We have had 115 bank failures so far this year, and they have cost the Federal Deposit Insurance Corp. $29 billion.[11]
Perhaps the AIG losses which Kemper estimates at $62 billion for the Treasury and Federal Reserve combined should really be considered bank losses.[11] A paper profit is much better than the black hole that taxpayers were staring into a year ago. David Kemper, chief executive of Commerce Bancshares, asserted this week that the Treasury will essentially break even on its investments in traditional banks. The TARP will lose somewhere between $60 billion and $130 billion, he said in a speech at Washington University, but virtually all of that will be on nonbank investments.[11] Wells Fargo appears poised to do the same. The Treasury even has a paper profit of roughly $11 billion on its stake in Citigroup, which once was banking's biggest basket case. Citigroup isn't yet in a position to repay the TARP money, and the Treasury couldn't sell its shares quickly without depressing the price.[11]
The big banks the focus of the public's ire during the congressional debate may not cost the Treasury much, if any, money when the program is finally wound down. JP Morgan, Goldman Sachs, U.S. Bank and others already have repaid their bailout money, at a profit to Uncle Sam.[11] Douglas Elliott, a fellow at the Brookings Institution in Washington, says Kemper's TARP estimates appear to be in the ballpark. "It's even conceivable, if you ignore interest costs, that we'll make a little money on the bank bailout," he said.[11] Commerce was the third-largest U.S. bank to survive without taking TARP money, but Kemper acknowledges that the bailout was necessary. "In retrospect, TARP was a brilliant decision in terms of calming the markets and injecting capital," he said.[11]
Warren gained prominence as an early voice questioning whether Treasury was providing enough transparency as it doled out the bailout money. She also was the first to propose creating a new agency to protect consumers against abuse by lenders and other financial enterprises. [8] If you are among the many consumers whose blood pressure rises when you hear about new, large bonus pay-out at financial institutions propped up by taxpayer bail-out money, here, for a change, is some good news.[10]
The panel took a warmer view of Treasury's efforts than it has in past reports, some of which accused the government of going too easy on banks at taxpayers' expense. [8] WASHINGTON — Government officials put trillions of taxpayer dollars on the line to guarantee risky bank assets — a strategy that could cause permanent and costly market distortions, a government watchdog says.[8] Bank of America was given guarantees on $118 billion of assets, but never went through with the agreement.[10] When Congress enacted the Troubled Asset Relief Program in October 2008, most Americans mentally wrote off the entire $700 billion as a loss.[11]
Had the economy taken a deeper dive and the guaranteed assets declined dramatically in value, tax payers could have been on the hook for much higher losses than originally approved under the TARP program.[10]
Gee, if the government had lowered our individual debt load costs, we'd all be on easy street, too. Folks are waiting months if not a year to get a resolution on the terms of their loans while banks are minimizing if not hiding their losses. The banks are increasing their fees and rates, continuing to focus on trades and mergers and we are all standing around eating a sandwich. Folks say those who overextended themselves don't deserve a break.[9] Even though many of the programs have now expired, the guarantees still provide invisible government subsidies even to healthy banks, according to the report.[8] The report, released Friday, says the guarantee programs became the single largest part of the government's effort to calm the markets.[8] The Panel concludes that unwinding the implicit guarantee of government support will be a critical part of phasing out the TARP program.[10]
Now, said the panel, it appears likely that the government will rake in more revenue in fees from the guarantees than will ultimately be paid out.[1]
The panel'''s most striking finding was about the size of the effective subsidy that G.E. Capital and Wall Street giants like Goldman reaped in the form of below-market borrowing costs. The panel estimated that the federal guarantees lowered those firms''' borrowing costs by about 39 percent.[9] '''The cost of moral hazard is not as easily measured as the price of guarantee payouts or the income from guarantee fees,''' the report notes, '''but it remains a real and significant force influencing the financial system today.'''[10] While the report takes a great deal of space dealing with the legal and accounting issues of TARP and other programs, it is an encouraging picture of how the Administration took huge risks to save the financial system, but then methodically worked to get the capital back.[5] "A significant element of moral hazard has been injected into the financial system and a very large amount of money remains at risk."[12]
Investors now assume that the government will step in if the funds teeter again, said Warren, also a Harvard Law School professor. She called that "an example of a free government subsidy in the marketplace." Taken together, these "implied guarantees" could lead banks to take excessive risk because they assume the government will be there to break their fall, the report says. [8] Since there is a $39.5 billion deductible, the highest possible risk for the Treasury is $3.96 billion.[7] Issuing guarantees instead of outright purchasing troubled assets enabled the Treasury to secure assets without paying an upfront price.[10] By providing guarantees instead of direct loans, the Treasury could avoid spending money upfront.[9]
The Temporary Guarantee Program for Money Market Funds (TGPMMF), which was the largest of the three programs, ended with no loss.[7] The FDIC created the Debt Guarantee Program (DGP) to encourage liquidity in the banking system, and numerous other programs.[10]
At the height of the credit crisis in late 2008 and early 2009, the government increased existing guarantees and stepped in as a guarantor in numerous other programs.[10] In September, the bank opted to pay the government $425 million to exit the program.[10]
A "severe" stress test scenario would result in losses of $43.9 billion, of which taxpayers would have to absorb nearly $4 billion.[3]
The panel is one of three oversight mechanisms Congress built into the financial bailout legislation. [8]
SOURCES
1. Watchdog: Taxpayers Likely to See Profit From Govt. Bank Help - ABC News
2. TARP Watchdog Sees Possible Profits From Guarantee Programs-''''''''' _ ''''''''' _ ''''''''''''
3. U.S. government backed $4.3 trillion in assets in crisis: report | Special Coverage | Reuters
4. Now Bailout Expectations Are Built In: Warren - Financials * US * News * Story - CNBC.com
5. US Guaranteed $4.5 Trillion In Financial Assets Creating Huge Taxpayer Risk 24/7 Wall St.
6. Congressional Oversight Panel Challenges Treasury Dept to Release Details of Citibank (NYSE: C) Bailout - American Banking News
7. TARP has 'no significant flaws', oversight panel finds -- DailyFinance
8. The Associated Press: Taxpayers risked trillions at height of crisis
9. Break for Companies in Bailout's Fine Print - DealBook Blog - NYTimes.com
10. Credit Card Help Topics » The Credit Crisis: Finally, Some Good news for Taxpayers
11. The federal bailout of banks may not be as costly as feared - STLtoday.com
12. AMERICAblog News| A great nation deserves the truth: US guaranteed $4.3 trillion during financial crisis
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