U.S. bailout watchdogs advise that the Treasury Department consider expanding programs to clear troubled assets from balance sheets if current efforts fail to improve the economy, reports Reuters. The Congressional Oversight Panel said in its latest monthly report that toxic loans and securities continue to threaten the stability of the financial system. Banks which face increasing losses on commercial real estate loans may need similar tests and capital support that the larger institutions have received. “Treasury must assure robust legacy securities and legacy loan programs or consider a different strategy to do whatever can be done to restart the market for those assets,” the panel said. The report comes has the Treasury is preparing to launch a scaled-down version of its toxic asset program.
U.S Bailout Panel: Toxic Assets May Need More Treasury Support
The Congressional Oversight Panel believes the Treasury should extend capital support to smaller institutions in addition to larger banks.
August 11, 2009