The federal government overpaid for stocks and other assets in attempting to help U.S. financial institutions last year, a government watchdog said today, taking further issue with the beleaguered $700 billion rescue program.
Elizabeth Warren, chairwoman of the Congressional Oversight Panel for the bailout funds, told the Senate Banking Committee today that Treasury in 2008 paid $254 billion and received assets worth about $176 billion.
The figures were reached by extrapolating the results of a study of 10 government transactions, comparing the price paid by Treasury and the value of the asset at the time of purchase. Warren did not present details of the transactions the panel analyzed. A full report will be released Friday.
In a bright spot for the rescue program, however, banks that received capital infusions from Treasury have already paid $271 million in dividends to the federal government.
A Treasury official said today that banks are expected to pay more than $1.5 billion in dividends by the end of this month. Among them is Wells Fargo, which received a $25 billion infusion. The bank announced this week it would pay Treasury $371 million in dividends. (AP)
