Bank execs will try to account for TARP
TEXT OF STORY
Bill Radke: Also tomorrow, Treasury Secretary Timothy Geithner will talk about
how the next part of the bank bailout will be spent. Reports are that Treasury will pump even more cash into banks try to help homeowners avoid foreclosures and encourage private investors to buy some of the banks’ so-called troubled assets.
So whatever happened to the first half of the bank bailout? All the money spent last year under the Troubled Asset Relief Program, or “TARP?” Well, bank executives will be testifying to Congress about that this week. Marketplace’s Nancy Marshall Genzer reports.
Nancy Marshall Genzer: Congress didn’t attach many strings to the first half of the TARP money. Banks aren’t required to say how they spent it. Trying to figure it out is like nailing Jell-O to the wall.
Even Elizabeth Warren has to guess. And she chairs a congressional oversight panel on TARP.
Elizabeth Warren: Some of the money went into buying other banks. Some of the money could have been used for buying assets in foreign countries. And it appears that some large portion of the money just was stuffed into bank vaults.
Warren says banks may have lent out some of the TARP money, but it’s hard to say, because no one kept track of the cash.
But Scott Talbott says that’s impossible. He’s the chief lobbyist for the Financial Services Roundtable.
Scott Talbott: Just as a husband and wife put their paychecks into a checking account, can you track which paycheck dollar was used to pay the electric bill?
That’s what bank executives will tell Congress. And Talbott says the execs will also emphasize that without the TARP money, lending would have gone into a freefall.
In Washington, I’m Nancy Marshall Genzer for Marketplace.
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