WASHINGTON, Aug. 11 (UPI) -- The $700 billion Troubled Asset Relief Program has failed in its stated mission of relieving U.S. banks of toxic assets, a congressional panel said.
The U.S. banking system has become more stable with billions of dollars of bailout funds invested in banks. But the Treasury Department used the funds to buy bank shares, not the assets targeted by the federal program, the panel monitoring the TARP program said in a report being released Tuesday.
"The nation's banks continue to hold on their books billions of dollars in assets about whose proper valuation there is a dispute and that are very difficult to sell," said the panel headed by Harvard Law School Professor Elizabeth Warren.
The New York Times reported banks have been reluctant to sell the assets that will subject them to on-paper losses. The Treasury, meanwhile, chooses to buy bank shares instead of frozen assets, a quicker formula for stabilization, the Times said.
Estimates of the value of the frozen assets range from $599 billion, a Federal Reserve estimate issued in May, to the RGE Economics estimate of $1.27 trillion.
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