We noted a while back that the Treasury Department faced a daunting task in choosing which securities to buy as part of the TARP. We suggested it would need lots of help. We can say the same for the on-going program to invest in banks directly. But while the Treasury signs up companies to help it value securities, it does not seem to have plans to retain help to value banks. The New York Times reports that a panel of just five Treasury employees is performing triage, deciding which banks to invest in and which banks to pass on (ostensibly because they are too sick to save). "The process is shrouded in secrecy, its precise goals opaque. Treasury officials have refused to disclose their criteria..." So this is something of a PR snafu. A related issue is whether the Treasury has a secondary goal of prodding healthy banks to buy sick ones. The PNC-National City deal suggested as much. Of course, banks receiving money are being told to lend it. But that's hardly their only option.

For more:
- here's the New York Times article

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