Before coming to the White House, Orszag called for 'clarity' on insolvent banks

TPM:


Before he became White House budget director, Peter Orszag headed the non-partisan Congressional Budget Office -- and in a little-noticed blog post six months ago, he called for "more clarity" on the relative solvency of individual banks as a means to help heal the economic crisis.

Orszag's call for transparency about the financial health of banks came during the early days of the bailout debate, before the Bush Treasury Department abandoned its plan to purchase toxic assets from banks and decided to provide large-scale capital injections instead. The bulk of his blog post is dedicated to a defense of mark-to-market accounting standards, which government financial regulators are about to relax.

CBO blog in September 2008:

An article in today’s Washington Post suggests that in testimony yesterday, I argued that the proposed Troubled Asset Relief Act of 2008 “could actually worsen the financial crisis” by forcing institutions to recognize new losses on their balance sheets through the sale of assets to the government and by revealing some of those same institutions to be insolvent. This is not fully accurate, and some clarification is in order.