Watchdog: Treasury overpaid for bank stocks

[Lasher]

Source: Associated Press

WASHINGTON – A government watchdog has concluded that the federal government gave financial institutions a $78 billion subsidy last year by overpaying for stocks and other assets as part of its massive Wall Street rescue program.

In a report scheduled for release Friday, the Congressional Oversight Panel for the bailout funds found that in some cases the government paid dramatically more than the actual value of the stocks at the time of the transactions.

Financially ailing insurance giant American International Group, deemed by the Treasury Department to be too big to be allowed to fail, received $40 billion from the Treasury for assets valued at $14.8 billion, the oversight panel found.

The findings added to the frustrations of lawmakers already wary of the $700 billion rescue plan, known as the Troubled Asset Relief Program. Congress approved the plan last fall, but members of both parties criticized spending decisions by the Bush administration and former Treasury Secretary Henry Paulson.

Read more: http://news.yahoo.com/s/ap/20090206/ap_on_go_ca_st_pe/bailout_oversight_10

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