The Government Accountability Office chided the Treasury Department yesterday for failing to address a number of key issues with respect to the Troubled Asset Relief Program (TARP). Chief among these in the congressional watchdog's 66-page report is the lack frameworks for (1) evaluating the impact of the government's direct investments in financial institutions and (2) monitoring limits on executive compensation and dividend payments.
It seems pretty reasonable to expect those things from the Treasury, given the extraordinary amounts of taxpayer funds at stake:
Company |
Government Preferred-Share Investment |
---|---|
Citigroup |
$45 billion |
JPMorgan Chase
Bank of America
Wells Fargo |
$25 billion each |
Goldman Sachs
Morgan Stanley |
$10 billion each |
Bank of New York
State Street |
$3 billion and |
Total (includes other institutions) |
$250 billion |
Source: U.S. Treasury, media reports.
The government has been taking some shortcuts in its efforts to stave off financial meltdown. In the instance of AIG
In a crisis, shortcuts may be necessary, but establishing a framework to evaluate the success of the program is no mere detail. It is a matter of the first priority. I hope and expect that the Treasury will address this promptly: As a former Goldman CEO, Treasury Secretary Hank Paulson isn't used to leaving things to chance, and his named successor, Tim Geithner, looks like a rigorous fellow. After all, any manager worth his salt knows: If you can't measure it, you can't manage it.
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