Treasury working on ways to tell if bank aid is helping
WASHINGTON -- The Treasury Department is developing tools to measure whether banks that receive funds from the $700 billion financial industry rescue program are increasing lending.
Neel Kashkari, assistant Treasury secretary in charge of the bailout program, said Tuesday that the department will compare the level of lending by banks that have received government money with lending levels by similar banks that haven't gotten assistance.
The Bush administration has been strongly criticized by lawmakers from both parties for not doing more to track the $189 billion invested so far in more than 250 banks in an effort to increase consumer credit and lending to businesses.
A congressional oversight panel set up to monitor the financial assistance program said last week that "direct measurements" of what individual company recipients have done are necessary to determine whether the program is benefiting the public.
A spokesman for the panel declined to comment on Kashkari's remarks.
Kashkari said the government will use regular quarterly reports on lending that banks already submit and also will collect monthly data from the largest banks that have received government money. The department hopes to begin gathering the data by the end of this month and to publish the results several weeks later, he said.
The Associated Press last month asked 21 banks that received more than $1 billion from the program to describe what has been done with the money. None would provide any specifics.
Kashkari said Tuesday he would remain at his post for several weeks after President-elect Barack Obama is inaugurated Jan. 20, to assist with the transition.
Kashkari's remarks reflect growing pressure on the financial industry to provide more accounting for how the funds are being used. The Federal Deposit Insurance Corp. on Monday called on the banks it regulates to document how they are using the government funds to boost "prudent lending" and help at-risk borrowers avoid losing their homes to foreclosure.
