Bailout watchdog: Treasury paid too much

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NEW YORK (CNNMoney.com) -- The Treasury Department overpaid for the assets it purchased as part of the $700 billion financial sector bailout, according to testimony of a bailout oversight official before Congress on Thursday.

At a Senate Banking Committee hearing, Elizabeth Warren, head of the Congressional Oversight Panel, testified that the more than $254 billion in assets that the government purchased in 2008 are worth just $176 billion - $78 billion less than what Treasury paid for them.

Warren said the shortfall happened on the date of the transaction, and is not representative of the market's movements since then. She noted that Treasury has failed to delineate a clear reason for such an overpayment.

"At various points Treasury has articulated policy objectives which could result in a program involved in paying substantially more for investments than they appear to have been worth at the time of the transaction," said Warren. "The American people want to know what's going on and they deserve answers."

Bailout watchdog: Treasury overpaid - Feb. 5, 2009