The issue of how to value warrants that will be bought back by top banks continues to simmer in Washington. Neil Barofsky, the TARP special inspector general, and Elizabeth Warren, the chairwoman of the Congressional oversight panel for TARP, will jointly work on a project that will audit the warrant repurchase process.

The big issue is how to price the warrants. Barofsky and Warren offered a glimpse into their views when they said they "believe that the pricing of the warrants held by Treasury...will be critical to ensuring an appropriate return on investment for the government and, consequently, American taxpayers," reports Reuters. A few banks, including JPMorgan Chase, are already in discussion with the Treasury Department over billions of dollars in warrants. Something that in smaller deals, the government sold at terms not advantageous to taxpayers. Banks argue they should get a discount because they did not want the money in the first place.

For more:
- here's the Reuters article

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