Foreign firms helped by U.S. bailouts: panel
(Reuters) - The U.S. tactic of pouring money into ailing financial firms during the 2007-09 crisis helped many foreign banks whose governments should have shared some of the burden, a report from a congressional watchdog agency said on Thursday.
In its latest critique of the Treasury Department's handling of the Troubled Asset Relief Program (TARP) -- set up in 2008 as a $700 billion rescue fund -- the Congressional Oversight Panel said other countries got help from U.S. rescue efforts that exceeded any benefit their programs provided to the United States.
It cited insurer American International Group, Inc as an example, noting that while banks in France and Germany were big beneficiaries of a U.S.-initiated rescue of AIG, "the U.S. government bore the entire $70 billion risk of the AIG capital injection program."
U.S. officials should have more closely tracked what banks were doing with bailout money and what operations in which countries were being helped, it said.
"While the United States attempted to stabilize the system by flooding money into as many banks as possible -- including those that had significant overseas operations -- most other nations targeted their efforts more narrowly toward institutions that in many cases had no major U.S. operations," the report noted.
"If the U.S. government had gathered more information about which countries' institutions would most benefit from some of its actions, it might have been able to ask those countries to share the pain of rescue," the report said.
The oversight panel is headed by Elizabeth Warren, considered a potential pick to head a new consumer protection agency created as part of the financial regulatory overhaul signed into law last month by President Barack Obama.
The panel report says it is not too late to seek some transparency about where TARP funds went and who benefited most from them, but notes the Treasury must pick up the pace.
[snip] - to keep things legal that is
http://www.reuters.com/article/idUSTRE67B0DD20100812?type=politicsNews
(Reuters) - The U.S. tactic of pouring money into ailing financial firms during the 2007-09 crisis helped many foreign banks whose governments should have shared some of the burden, a report from a congressional watchdog agency said on Thursday.
In its latest critique of the Treasury Department's handling of the Troubled Asset Relief Program (TARP) -- set up in 2008 as a $700 billion rescue fund -- the Congressional Oversight Panel said other countries got help from U.S. rescue efforts that exceeded any benefit their programs provided to the United States.
It cited insurer American International Group, Inc as an example, noting that while banks in France and Germany were big beneficiaries of a U.S.-initiated rescue of AIG, "the U.S. government bore the entire $70 billion risk of the AIG capital injection program."
U.S. officials should have more closely tracked what banks were doing with bailout money and what operations in which countries were being helped, it said.
"While the United States attempted to stabilize the system by flooding money into as many banks as possible -- including those that had significant overseas operations -- most other nations targeted their efforts more narrowly toward institutions that in many cases had no major U.S. operations," the report noted.
"If the U.S. government had gathered more information about which countries' institutions would most benefit from some of its actions, it might have been able to ask those countries to share the pain of rescue," the report said.
The oversight panel is headed by Elizabeth Warren, considered a potential pick to head a new consumer protection agency created as part of the financial regulatory overhaul signed into law last month by President Barack Obama.
The panel report says it is not too late to seek some transparency about where TARP funds went and who benefited most from them, but notes the Treasury must pick up the pace.
[snip] - to keep things legal that is
http://www.reuters.com/article/idUSTRE67B0DD20100812?type=politicsNews