Watchdog: Treasury overpaid for bank stocks

The federal government overpaid for stocks and other assets in attempting to help financial institutions last year, a government watchdog said Thursday, 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 on Thursday 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.

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Posted in * Economics, Politics, Credit Markets, Economy, The Credit Freeze Crisis of Fall 2008/The Recession of 2007--, The September 2008 Proposed Henry Paulson 700 Billion Bailout Package