The Congressional Oversight Panel released a report saying that the U.S. treasury should provide regular reports about losses from the $301 billion worth of assets that the federal government agreed to guarantee for Citibank (NYSE: C) last year in an attempt to prevent the bank’s collapse.
In the report, the Congressional Oversight Panel, said such guarantees “carry considerable risk to taxpayers.” Some have estimated that the government was once on the hook for $4.3 trillion worth of guarantees for insuring money market funds, financial firms’ debt, and other assets owned by Citi and Bank of America.
The panel wrote, “In light of these guarantees’ extraordinary scale and their risk to taxpayers, the panel believes these programs should be subject to extraordinary transparency.” The report also said that the treasury should provide taxpayers with information about the make-up of Citibank’s guarantee asset pool, its losses and future projected losses.
In Citibank’s case, the New York Bank paid the government $7.3 billion in preferred stock for the guarantees that were provided last November amidst the worst financial crisis since the great depression.
Treasury spokeswoman, Meg Reilly, made a statement saying that the report “correctly recognizes that Treasury’s guarantee program for money-market mutual funds earned more than $1.2 billion in income for taxpayers, while helping to stabilize our financial system at a time of severe stress,” Reilly continued, “Treasury has now successfully closed the program with no losses.”
