Treasury Demands TARP Accountability from BanksBanks that received money from the Troubled Assets Relief Program will now have to send monthly reports detailing figures on business and consumer loans. Neel Kashkari, the official appointed by Treasury Secretary Henry Paulson to administer TARP, wrote Citigroup, Bank of America and 18 others last week seeking those numbers along with information on purchases of mortgage-backed securities and asset-backed securities.
Kashkari will remain administrator of the TARP for a few months after the new Obama administration comes in. The 20 banks targeted by Kashkari received the most capital from the government's $700 billion rescue program. Paulson has been criticized for his approach to TARP -- many say his plan doesn't have enough transparency and isn't doing enough to get the credit flowing to businesses and consumers.
Last week FDIC also called for banks that it regulates to be able to document where their TARP money was being spent. Obama's request to release the remaining $350 billion of the program will come with strings attached for institutions and others seeking the funds, with stringent reporting stipulations promised.
Wall Street Inauguration Rally Expected
Wall Street's inauguration rally may meet head on with investor fears of a spreading global banking crisis that set the market up for a lower opening.
Investors were shaken by news over the three-day weekend that the Royal Bank of Scotland may post a $41.3 billion loss -- the largest loss ever reported by a British company -- along with the news that the British government would again bail banks out, the second time in three months, pushing that country's banks toward nationalization. The British government now has a 70 percent stake in RBS.
While all eyes will be on Washington as President-elect Barack Obama is sworn in as the country's 44th president, investors will focus on what will happen in the days after the ceremony. Obama will first tackle the economic stimulus proposals he presented to Congressional leaders last week.