Though some economic measures are improving, the financial crisis "is far from over" and "appears to be taking root in the larger economy."
This, despite the government's commitment to spend trillions of taxpayer dollars on a massive bailout of the financial system.
These were the findings released in a report today by the Congressional Oversight Panel, the body charged with overseeing the government's Troubled Asset Relief Program, the $700 billion plan aimed at bailing out the country's financial sector.
"We still have a long way to go. A very long way," Elizabeth Warren, the Harvard Law School professor who chairs the panel, said in an interview today with Bloomberg News.
The panel reported that the government has spent, lent or set aside more than $4 trillion through the Troubled Asset Relief Program, the Federal Reserve and the Federal Deposit Insurance Corporation.
Today, the "credit markets no longer face an acute systemic crisis in confidence that threatens the functioning of the economy," the report said.
But, it said, the economy now faces an "apparently prolonged period of weakness" with regard to financial firms and lending.
It noted, for instance, that Citigroup and Bank of America received multiple injections of capital from the government while borrowing costs remain high for businesses and individuals. The panel also cited increasing numbers of home foreclosures and lower home prices as reasons for concern.
The panel criticized the Treasury Department for failing to identify what measurements it will use to determine whether its rescue programs are working.
"If you don't articulate what the metrics are going out ... you can't know if anything succeeded or failed," Warren said.
Warren also criticized the Treasury for its lack of openness on its rescue efforts as it first began the TARP program last year.
"As Treasury started this program," she said, "they really had the notion that they would spend the money the way they wanted, and not only were they not going to tell the public, I don't think they were going to tell the Congressional Oversight Panel."
The Treasury Department recently unveiled a Web site dedicated to detailing the government's financial stability efforts. On the site, the department promises that the government's financial stability plan "will institute a new era of accountability, transparency and conditions on the financial institutions receiving funds."