Holding Treasury's TARP Exit Strategy to a Higher Standard

When Congress passed the Troubled Assets Relief Program in October, 2008, it also created the Congressional Oversight Panel (COP), a five-member board charged with the responsibility to "review the current state of financial markets and the regulatory system." In a report to Congress released on Jan. 14, COP says the Treasury Department should more clearly articulate an exit strategy from TARP. It also wants Treasury to reduce the "moral hazard" now seen in the financial marketplace, thanks to the widespread belief that the government will "rush in to rescue financial institutions deemed too big to fail."