
Congressional Oversight Panel (COP)
The Congressional Oversight Panel (COP) was an oversight body that Congress created in 2008 to monitor the U.S. Treasury and its implementation of the $700 billion Trouble Asset Relief Program (TARP). The panel was empowered to hold hearings, review data, and write reports on the efforts of the Treasury and other financial institutions as they worked to stabilize the economy in the midst of the 2007-2008 Financial Crisis. The Congressional Oversight Panel was created by Congress to monitor the U.S. Treasury's implementation of the $700 billion Trouble Asset Relief Program (TARP). The panel's duties were to oversee the Treasury department's actions; assess the impact of spending to stabilize the economy; evaluate market transparency; ensure efforts to mitigate property foreclosures were effective; and ensure the Treasury took actions that were in the best interests of the public. It created of the Office of Stabilization within the Treasury department to implement TARP, and also the Congressional Oversight Panel to monitor these efforts. TARP was initially created as a $700 billion program to increase the liquidity of the secondary mortgage markets by purchasing illiquid mortgage-backed securities, and through that, reducing the potential losses of the institutions that owned them.

What Is the Congressional Oversight Panel?
The Congressional Oversight Panel (COP) was an oversight body that Congress created in 2008 to monitor the U.S. Treasury and its implementation of the $700 billion Trouble Asset Relief Program (TARP).
The panel was empowered to hold hearings, review data, and write reports on the efforts of the Treasury and other financial institutions as they worked to stabilize the economy in the midst of 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 via TARP to stabilize the economy. It created of the Office of Stabilization within the Treasury department to implement TARP, and also the Congressional Oversight Panel to monitor these efforts.
The panel's duties were to oversee the Treasury department's actions; assess the impact of spending to stabilize the economy; evaluate market transparency; ensure efforts to mitigate property foreclosures were effective; and ensure the Treasury took actions that were in the best interests of the public.
In addition to COP, other oversight bodies examining TARP spending included the Special Inspector General for TARP and the Government Accountability Office.
Panel's Findings
By statute, the panel ceased operations on April 3, 2011. Its final report dated March 16, 2011, detailed the government's efforts to emerge from the financial crisis and restore order and liquidity to the credit and debt markets.
TARP was initially created as a $700 billion program to increase the liquidity of the secondary mortgage markets by purchasing illiquid mortgage-backed securities, and through that, reducing the potential losses of the institutions that owned them. Later, it was modified to allow the government to buy equity stakes in banks and other financial institutions.
At the time TARP was created, Ben Bernanke, then chair of the Federal Reserve, said the nation was on course for "a cataclysm that could have rivaled or surpassed the Great Depression."
This fate was avoided partly because TARP provided a critical back stop for markets at a time of great upheaval. However, the report stated that TARP had distorted markets by reinforcing the perception that large financial institutions were "too big to fail."
"By protecting very large banks from insolvency and collapse, the TARP also created moral hazard," the report said. "Very large financial institutions may now rationally decide to take inflated risks because they expect that, if their gamble fails, taxpayers will bear the loss. Ironically, these inflated risks may create even greater systemic risk and increase the likelihood of future crises and bailouts."
In addition, in what the report called perhaps the "most profound violation of transparency," the Treasury decided at the onset of TARP to push tens of billions of dollars out to very large financial institutions without requiring banks to reveal how the money was used. "As a result, the public will never know to what purpose its money was put."
Related terms:
Emergency Economic Stabilization Act (EESA) of 2008
The Emergency Economic Stabilization Act (EESA) of 2008 was passed by Congress to help repair the damage from the financial crisis of 2007-2008. read more
Financial Crisis Responsibility Fee
The Financial Crisis Responsibility Fee was a federal tax proposed by President Obama in 2010. read more
Financial Crisis
A financial crisis is a situation where the value of assets drop rapidly and is often triggered by a panic or a run on banks. read more
Foreclosure
Foreclosure is the legal process by which a lender seizes and sells a home or property after a borrower is unable to fulfill their repayment obligation. read more
Government Accountability Office (GAO)
The Government Accountability Office (GAO) is a U.S. legislative agency that monitors and audits government spending and operations. read more
What Was the Great Depression?
The Great Depression was a devastating and prolonged economic recession that followed the crash of the U.S. stock market in 1929. read more
Liquidity Crisis
A liquidity crisis refers to a widespread increase in demand for and decrease in supply of liquidity in an economy. read more
Mortgage-Backed Security (MBS)
A mortgage-backed security (MBS) is an investment similar to a bond that consists of a bundle of home loans bought from the banks that issued them. read more
Moral Hazard
Moral hazard exists when a party to a transaction has an incentive to take unusual business risks because he is unlikely to suffer potential consequences. read more