TPMDC | Talking Points Memo | Before Coming to the White House, Orszag Called For 'Clarity' on Insolvent Banks

Talking Points Memo | Before Coming to the White House, Orszag Called For "Clarity" on Insolvent Banks

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.

Yet Orszag's emphasis on clarifying the solvency question is worth heeding as the Obama Treasury sends mixed signals on whether the results of its coming bank "stress tests" will be made public. The head of the Federal Deposit Insurance Corporation said last month that the administration would look to the banks themselves to reveal the outcome of the "stress tests" to the public, while the Times reported outright that not every bank's solvency information would be openly revealed.