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"Our financial system and our economy remain vulnerable, with unemployment still rising, house prices falling and pressure on commercial real estate continuing to build," Allison said in prepared testimony for the Congressional Oversight Panel, the committee set up by lawmakers to oversee TARP. Allison said TARP's Capital Purchase Plan has invested nearly $200 billion into 633 financial institutions. He noted that 30 firms that received cash injections from the government have repaid $70 billion and added that about $5 billion has been received in dividends on stock that the government received in return for investing in firms. Allison promised to "keep in mind that ending the financial crisis isn't chiefly about helping banks. It's about alleviating the real hardships that Americans face every day." Allison also said he will review the controls over the use of the taxpayers' money that funds TARP and try to make sure its operations are sufficiently transparent that people can see what is being done and how it's helping the economy. Elizabeth Warren, chairman of the Congressional Oversight Panel, said in her opening statement that while the economy is showing signs of "green shoots" it is little consolation to the 9.4% of the population that is out of work or the several million people who have lost their homes and the thousands more that are facing foreclosure and an uncertain future. "These Americans want to know that the government has their interests at heart." Warren also told Allison she was particularly concerned about how recent bank stress tests were structured and whether those results were too easy on the country's biggest banks. Allison deflected some responsibility, noting that banking regulators oversaw tests analysis. But he also noted that since the industry largely received a clean bill of health from the tests, banks have seen their capital base increase from private investments as well as their share prices. This did not sit well with Warren. "I'm unnerved -- if one offered a very gentle stress test and the stock market responded well, that's not the reality of the situation. Given some of the concerns about the stress tests and recent negative economic news and fears for the commercial mortgage market ... in order to be more transparent why not do the tests again under more difficult circumstances?" Allison said Treasury agrees that periodic stress tests should be done, especially for the bigger banks. - Donna Block See Allision's prepared remarks
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Assistant Secretary of the Treasury Herb Allison on Wednesday delivered his first public testimony since being confirmed June 19 to head the Troubled Asset Relief Program. The new overseer of the $700 billion bank bailout fund said on Wednesday that the U.S. economy is showing signs of life but the government needs to remain vigilant in its recovery efforts. 
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