Elizabeth Warren: "I’m Not Hearing the Plan" by Government to Fix the Economy
Courtesy of Washington’s Blog
Elizabeth Warren – Chair of the Congressional Oversight Panel for the Troubled Asset Relief Program – told the Senate Committee on Banking, Housing and Urban Affairs today:
In April, the Panel looked back on the first six months of Treasury’s TARP efforts and offered a comparative analysis of previous efforts to combat banking crises in the past. We found that the successful resolution of past financial crises involved four critical elements: transparency of bank accounting, particularly with respect to the value of bank assets; assertiveness, including taking early aggressive action to improve salvageable banks and shut down insolvent institutions; accountability, including willingness to replace failed management; and clarity in the government response. Without those elements, a financial crisis is likely to create long-term economic problems.
The government, of course, hasn’t implemented any of these recommendations.
Warren told the panel:
The toxic assets remain on the books of the banks, The commercial real estate mortgages are a coming crisis. Small banks are continuing to fail. We were talking a year ago about too big to fail. We are now facing an industry that’s more concentrated than it was a year ago and too big to fail is up on us now in a much larger sense.
Until we get down to dirt, to something that’s solid, that we can put our feet on, our financial institutions are standing in a secure place, we can’t rebuild and know that we are safely past this crisis.
