Treasury Report: “Premature” to Say if Bailout Is Working

Under the bailout bill passed by Congress early this month, the Treasury Department must issue a report to Congress whenever it expends $50 billion. The first one came on Tuesday.

It’s a modest document – just four pages, without much more than a summary of Treasury’s recent steps in rolling out its capital injection program.

As you can see from our tally of Treasury investments in the nation’s banks, we’re now up to $170.8 billion, a total of 43 banks. That’s a list of the banks that have announced preliminary approval for the program, but Treasury has only actually delivered the money for the first nine banks, for a total of $115 billion ($10 billion has been set aside for Merrill Lynch, but that investment has been postponed pending its merger with Bank of America).

Since that investment only occurred last week, the report says, it’s “premature” to assess the program’s impact. But other steps taken by the Treasury, Federal Reserve, and FDIC, it says, have had an effect (the credit markets have indeed thawed from their worst point in September and early October).

We’ll let you know when Treasury files its next report, which shouldn’t be in too long, given the pace with which it’s actually doling out billions. Maybe by then they’ll be able to assess whether the centerpiece of the administration’s bailout plan is having any impact.

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