With so much confusion in the financial marketplace one thing is apparent: the American people deserve to know what government-supported banks are doing and how our tax dollars are being used. The uncertainty families are feeling in this economy is only magnified by the lack of clarity in the programs our government created to jump-start frozen credit markets. In order to rebuild our economy we must rebuild lost confidence in the financial system. The government can and should continue to stabilize troubled financial institutions -- but getting an honest reading of how these institutions are aided by the government is the only way to gain the trust of the American people. This is why I proposed H.R. 1242, The TARP Accountability and Disclosure Act, to provide for additional monitoring and accountability of the Troubled Assets Relief Program (TARP).
H.R. 1242 tasks the government with collecting existing data that is reported and make it available in real time, in a standardized format, so it can create a 360 degree picture of the recipient's activities and use of TARP funds.
The Congressional oversight hearings I've participated in, both as Chair of the Joint Economic Committee and as a senior member of the Financial Services Committee, have made it clear -- we lack even a basic understanding of where the first tranche of the TARP money went. This is inexcusable. There are many proposals for more transparency and better reporting, but my bill provides one simple and necessary step. It would create a central government database that collects all the financial information about entities that receive TARP funds. This information is presently scattered through multiple government agencies and the private sector and is not reported in a form that enables compilation or comparison.
Because of the ad hoc nature of financial disclosures, when accurate information does become public it is often very slow to arrive. On Sunday, we finally learned the names of the counterparties AIG paid through credit default swaps while the US government was bailing them out. I originally asked for this information at a hearing in November, and then in February, and again two weeks ago. This disclosure a good first step, but I'm concerned by how long it took. Not having an honest accounting of these funds was not acceptable. Transparency about the counterparties is essential to having an informed debate and developing solutions to our current economic crisis, as well as to Congress ability to oversee the use of taxpayers' money.
This demonstrates the necessity of the TARP Accountability and Disclosure Act. The speed with which the economic crisis is unfolding requires that future disclosures be made in a much more timely fashion and be widely accessible.
Government money alone will not repair the lost trust in our financial markets. Transparency and accountability for the banks, combined with targeted programs that bolster weakened areas of our economy, will go a long way to restoring the confidence our economy really needs.