Toxic Assets Antidote Remains Elusive for Banks

WASHINGTON (TheStreet) -- It seems the antidote to toxic assets hasn't yet been discovered.

In the 10 months since the Troubled Asset Relief Program was unveiled, there has been plenty of talk of troubled loans on bank balance sheets. Trillions of taxpayer dollars have been put on the line to address them. But they're still sitting on the books, in largely the same shape they were nearly a year ago when they first garnered public attention, according to a report Tuesday by the Congressional Oversight Panel.

The report goes through a brief history of major events in the financial crisis: Former Treasury Secretary Henry Paulson's initial plan to buy the bad debt outright, why it didn't work, and what has happened since . It discusses the relaxation of accounting standards, the boondoggled Public-Private Investment Program, the stress tests and the fact that bad loans kept going bad as conditions worsened.

But while the report sanctions what bank investors have long known, it doesn't say much that is new.

After going through all the problems and various types of solutions, it makes vague recommendations, some of which are already in place. It suggests that the government perform additional stress tests, implement a plan that works to kick start the market for troubled assets and require that banks disclose more about bad assets.

"Part of the financial crisis was triggered by uncertainty about the value of banks' loan and securities portfolios," notes the report. "Changing accounting standards helped the banks temporarily by allowing them greater leeway in describing their assets, but it did not change the underlying problem."