Congressional Oversight Panel (COP)
What Is the Congressional Oversight Panel?
The Congressional Oversight Panel (COP) was an oversight body that Congress made in 2008 to monitor the U.S. Treasury and its implementation of the $700 billion [Trouble Asset Relief Program](/disturbed asset-relief-program-tarp) (TARP).
The panel was engaged to hold hearings, survey data, and compose reports on the efforts of the Treasury and other financial institutions as they attempted to settle the economy amidst the 2007-2008 Financial Crisis.
Understanding the Congressional Oversight Panel (COP)
In response to the financial crisis, Congress authorized the Treasury to spend $700 billion through TARP to balance out the economy. It made of the Office of Stabilization inside the Treasury department to execute TARP, and furthermore the Congressional Oversight Panel to monitor these efforts.
The panel's duties were to administer the Treasury department's activities; survey the impact of spending to balance out the economy; assess market transparency; guarantee efforts to alleviate property foreclosures were successful; and guarantee the Treasury made moves that were to the greatest advantage of the public.
Notwithstanding COP, other oversight bodies analyzing TARP spending incorporated the Special Inspector General for TARP and the Government Accountability Office.
Panel's Findings
By statute, the panel stopped operations on April 3, 2011. Its last report dated March 16, 2011, itemized the government's efforts to rise out of the financial crisis and reestablish order and liquidity to the credit and debt markets.
TARP was initially made as a $700 billion program to increase the liquidity of the secondary mortgage markets by purchasing illiquid mortgage-backed securities, and through that, lessening the expected losses of the institutions that owned them. Afterward, it was modified to permit the government to buy equity stakes in banks and other financial institutions.
At the time TARP was made, Ben Bernanke, then chair of the Federal Reserve, said the nation was on course for "a disturbance that might have equaled or outperformed the Great Depression."
This destiny was stayed away from incompletely in light of the fact that TARP gave a critical stopping board to markets all at once of great commotion. In any case, the report stated that TARP had contorted markets by building up the discernment that large financial institutions were "too big to even think about failing."
"By protecting extremely large banks from insolvency and collapse, the TARP additionally made moral hazard," the report said. "Exceptionally large financial institutions may now reasonably choose to face expanded challenges since they anticipate that, assuming their bet fails, citizens will bear the loss. Incidentally, these swelled risks might make even greater systemic risk and increase the probability of future emergencies and bailouts."
Also, in what the report called maybe the "most significant violation of transparency," the Treasury chose at the beginning of TARP to push a huge number of dollars out to exceptionally large financial institutions without expecting banks to uncover how the money was utilized. "Subsequently, the public won't ever be aware to what purpose its money was put."
Features
- The panel was engaged to audit efforts by the Treasury department to settle the economy during the 2007-2008 Financial Crisis.
- In its last report, the panel said TARP had misshaped markets by building up the discernment that large financial institutions were "too big to even consider failing."
- The Congressional Oversight Panel was made by Congress to monitor the U.S. Treasury's implementation of the $700 billion Trouble Asset Relief Program (TARP).
