WASHINGTON (AP) - The head of a congressional panel overseeing
the federal financial system bailout fund says Washington initially
underestimated how much banks in America were struggling to stay
afloat.
Elizabeth Warren says the approval of a repayment to the
government of $68 billion by several of the banks receiving
taxpayer assistance amounts to "phase two of the economic
recovery" in the system.
But at the same time, Warren said in an interview on CBS's "The
Early Show," that then-Treasury Secretary Henry Paulson last year
erroneously proclaimed banks to be stable when the government
initially put some $350 billion into these institutions.
She said that Paulson at the time said "they were all healthy
banks. ... It just really turned out not to be the case."
Warren said she believes the government now is getting "a much
more realistic assessment, and they're in the process of sorting
the wheat from the chaff."