TEXT OF STORY
KAI RYSSDAL: Treasury Secretary Geithner made a lot of promises about transparency today. He said the government is setting up a new website to let the public know who’s getting government money and how they’re using it. Some critics are calling for even more public accountability. Others worry that transparency will spook the markets.
Marketplace’s Nancy Marshall Genzer explains.
NANCY MARSHALL GENZER: Treasury Secretary Geithner says the new website, FinancialStability.gov, will show whether federal money is actually increasing lending.
Timothy Geithner: The American people will be able to see where their tax dollars are going, and the return on their government’s investment.
The Treasury Department already requires monthly reports from some banks that get the most government cash. They have to disclose loan information and purchases of some securities. But some critics say Treasury is just trying to placate taxpayers.
ROBERT BRUSCA: Transparency is kind of like a magic elixir. It’s something that people talk about but nobody drinks.
Robert Brusca is chief economist for Fact and Opinion Economics. He says it’s really hard to track how banks spend taxpayer dollars. Even if banks say they’re sequestering the money in a special account.
BRUSCA: You’re going to be watching religiously things in this one account where the banks want you to look and you’re not going to look at other things. No, you want to look at everything that they do.
But some regulators say banks might be skittish about asking for emergency help if they knew the public would find out. And there are concerns that Geithner’s new transparency rules could be a little too revealing, undermining public faith in banks and their stocks. On the other hand:
JAMES ELLMAN: We already have a great deal of stock market volatility. We already have very low share prices for these companies.
That’s James Ellman, president of Seacliff Capital in San Francisco.
ELLMAN: So I doubt that more transparency would make the situation worse. I think it will make it better.
And Ellman says the government shouldn’t hesitate to take over weak banks.
In Washington, I’m Nancy Marshall Genzer for Marketplace.
There’s a lot happening in the world. Through it all, Marketplace is here for you.
You rely on Marketplace to break down the world’s events and tell you how it affects you in a fact-based, approachable way. We rely on your financial support to keep making that possible.
Your donation today powers the independent journalism that you rely on. For just $5/month, you can help sustain Marketplace so we can keep reporting on the things that matter to you.