Elizabeth Warren, chairman of the TARP Congressional Oversight Panel, testifies at a hearing on Capitol Hill, in Washington, D.C.
Elizabeth Warren, chairman of the TARP Congressional Oversight Panel, testifies at a hearing on Capitol Hill, in Washington, D.C. - 
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Steve Chiotakis: Congressional Oversight Panel on the Troubled Asset Relief Program has a new report for the new year. The TARP is expected to be phased out this year, but in today's report auditors are raising concerns about how the government intends to do that. Harvard Law professor Elizabeth Warren chairs the panel, she's with us now. Good morning professor.

Elizabeth Warren: Good morning.

Chiotakis: So if this report is a look ahead at TARP, I mean how then do we figure the government puts this program to rest? But also the idea of "too big to fail," is that forever engrained in the financial system now?

Warren: Well, you've really put your finger on it, cause this is going to be a tough program to put to rest. Even after we get repaid the money -- if we ever get repaid the money -- that has been lent out under TARP, we're going to have the lingering memory of the fact that the U.S. government was willing to shovel hundreds of billions of taxpayer dollars in, basically to rescue a handful of very large financial institutions.

Chiotakis: So how do we fix that? How do we stop them from getting so big?

Warren: We have a couple of options. You could break them up. You could decide to tax them. You could decide to regulate them more heavily. Or you could use sort of the far end of it and say we're going to change the basic rules about bankruptcy and liquidation so that it is possible to break them up if they get into financial trouble and to liquidate them.

Chiotakis: Well, when all of this was sort of being hammered out in what was it, September of '08, right? And it seems like a hundred years ago, doesn't it?

Warren: Hahah! You think it seems like a hundred years ago to YOU, you haven't been down in Washington doing this!

Chiotakis: Hah, well you know the oriiganl purpose going in was about toxic assets, right? And we were talking about getting rid of toxic assets, and all of a suddent you know, here we are a year and a half later and we're still dealing with toxic assets that hasn't been discussed -- why?

Warren: Well this is one of the things that's most deeply troubling about this bailout. The underlying issues, the problems that brought us tot he brink of collapse, have not yet been resolved. It seems to me that we still face a lot of frigility and a lot of risk. And we've got to start changing some rules here, we've got to start dealing with these big financial institutions, and we need to do it now.

Chiotakis: Professor Elizabeth Warren, chair of the Congressional Oversight Panel, thanks for being with us.

Warren: Thank you for having me.