Geithner to Be Grilled About TARP on Tuesday

The Congressional Oversight Panel for the Troubled Asset Relief Program said Geithner will testify at 10 a.m. EDT on Tuesday.

It did not announce any other witnesses for the hearing on Capitol Hill.

The panel's chairman, Harvard Law School professor Elizabeth Warren, has been critical of the Treasury for receiving too little value for its investments in banks from the $700 billion bailout fund and for a lack of transparency in developing and executing its bailout programs.

Last month, Warren told the Senate Finance Committee that she had "substantial questions" about a new consumer lending program that the Treasury has launched with the Federal Reserve and a plan to create public-private investment funds to buy toxic assets from banks.

In a report issued last week, the panel said the TARP could well get the United States through the economic crisis but will not likely be enough if the downturn is worse than expected or if some crucial Treasury assumptions about toxic assets prove incorrect.

The key will be whether toxic asset prices reflect fundamental values that are just a fraction of their previous worth, or whether they are artificially depressed by frozen markets.

The Treasury hopes that by jump-starting the market for these mortgages and related securities with government subsidies, liquidity will return and asset prices will rebound.

"If its assumptions are correct, Treasury's current approach may prove a reasonable response to the current crisis," the panel said in the 151-page report.

A lasting depression in asset values could require a shift in tactics, the panel said.

"If the economic crisis is deeper than expected, it is possible that the Treasury will need to take very different actions in order to restore financial stability," it said.

Besides Warren, the panel includes U.S. Representative Jeb Hensarling, a Texas Republican; Richard Neiman, the New York state banking superintendent; Damon Silvers, associate general counsel of the AFL-CIO; and former U.S. Senator John Sununu of New Hampshire.