Bailout efforts lacking - Oversight board

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Bailout efforts lacking - Oversight board
« Thread Started on Dec 10, 2008, 8:05am »

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Bailout efforts lacking - Oversight board
Posted: 07:23 AM ET
By David Goldman
CNNMoney.com staff writer
NEW YORK (CNNMoney.com) — The Treasury Department must do more to rescue
struggling homeowners and ensure that the money it’s using to bail out banks is
working, according to a draft report by a congressional oversight panel
released Wednesday.

The report said that Treasury must establish clear measures to gauge the
$700 billion Troubled Asset Relief Program. The special panel, which was set up
by Congress to oversee the bailout, also suggested that the Treasury chronicle
how institutions use funds and to hold them accountable.

“American taxpayers need to know that their money is having a tangible
effect on improving financial stability, credit availability, and the economy
as a whole,” the draft report said. “As a first step, Treasury needs to provide
a detailed assessment of whether the funds it has spent so far have had any
effect - for better or worse - in these areas.”

The final report will be presented to Congress on Wednesday prior to a 10
a.m. ET House Financial Services Committee hearing on the bailout.

The draft report questioned why Treasury had not required banks receiving
bailout funds to, in turn, lend more to businesses, noting that a similar
government bank rescue in Great Britain mandates that banks lend to small and
mid-size businesses. It also implored officials to assure the public that they
have plans to address possible further problems in the economy.

“Even in the context of a massive crisis, we cannot manage one battle at
a time,” the panel wrote. “We need to hear a coherent strategy for managing us
out of this crisis.”