UPDATE: In response to a question from a Finance Committee member, Warren said the commercial real estate problem will bring “additional profound stresses on the financial system” and the panel has urged Treasury to work with small banks to develop plans to repay TARP funds.
Elizabeth Warren, chairwoman of the Congressional Oversight Panel — the body monitoring the Troubled Asset Relief Program — just gave a troubling review of the health of small banks in testimony before the Senate Finance Committee.
While most of the biggest banks have repaid TARP money, many of the smallest banks have not, Warren said. A “coming crisis in commercial real estate” will make it difficult for small banks to repay the taxpayers’ investment, she said.
Warren and other panel members are covering a lot of TARP-related issues — GM, AIG, Goldman, etc. Click here to watch their testimony on C-SPAN’s website.