The Congressional Oversight Panel -- aptly shortened to COP -- which polices Treasury Department actions regarding the Troubled Asset Relief Program and monitors financial markets and the relating regulatory actions, in its April report took a critical look at the Treasury's strategy six months and a combined $4 trillion into the TARP implementation. The COP report, submitted Tuesday, also studied some strategies that could be used going forward based on their effectiveness in recent historical case studies, specifically liquidation, receivership, or subsidization of firms. In the brief 150-page report file -- complete with supplemental views and an exhaustive run-down on correspondence (at times lack thereof) with the Treasury -- the COP stressed that historical lessons show the most effective response to banking crises has involved a combination of ousting "failed management" and liquidating banks. The April report scrutinizes the Treasury's responses in these areas, its general view of the causes of the crisis and how effectively it has implemented its goals in dealing with the crisis. The COP found that through "an array of programs" within the TARP, in concert with the Federal Reserve's efforts on the secondary securitization markets side, the Treasury has spent or committed $590.4 billion. That's after the adjustment for expected spending through the Capital Purchase Program from $250 billion to $218 billion. The total value of all spending, loans, and guarantees -- including those at the FDIC, Treasury and FED -- has topped $4 trillion, COP said. But simply throwing billions of dollars around will not resolve financial crisis, as the April report went on to illustrate four "critical elements" to any resolution strategy: transparency, assertiveness, accountability and clarity. COP members described assertiveness as a "willingness to take aggressive action to address failing financial institutions by (1) taking early aggressive action to improve capital ratios of banks that can be rescued, and (2) shutting down those banks that are irreparably insolvent." Accountability, panel members wrote, implies a "willingness to hold management accountable by replacing – and, in cases of criminal conduct, prosecuting – failed managers," while clarity in the Treasury's strategy will help consumers and investors know what to expect, bolster confidence in the system and encourage open communication with the administration Liquidation: a 'Hobson's choice'? Although the April report acknowledged some panel members disagreed on some findings, overall the COP report thoroughly outlined some pros and cons to the various strategies suggested. Under government reorganization, bad assets can be removed, failed managers can be ousted or replaced, and business segments can be spun off from the institutions. "Depositors and some bondholders are protected, and institutions can emerge from government control with the same corporate identity but healthier balance sheets," panel members wrote. Another strategy, subsidization, entails government-provided financial resources to financial institutions "at risk of becoming insolvent." Although the panel members acknowledged an institution's bank holding company must support it before any institution receives aid, "by the time a crisis is reached, a distressed bank will have already exhausted available assets of its [holding company]," the COP wrote. The subsidization method, in which one weak institution receives federal aid while a stronger one continues without it, "can have a substantial negative impact on the functioning of competitive markets," panel members wrote. Subsidies also "carry a risk of obscuring true valuations," the COP noted. "They involve the added danger of distorting both specific markets and the larger economy," the report reads, in part. "Subsidization also carries a risk that it will be open-ended, propping up insolvent banks for an extended period and delaying economic recovery.... Rather than subsidizing large distressed banks as going concerns through government investment under the TARP, critically undercapitalized banks could be selected for effective liquidation by being placed into the receivership of the [Federal Deposit Insurance Corp.]." The COP report reiterated that in either a receivership or conservatorship, the FDIC can remove failed managers from these institutions, as well as sell assets at current market value, which would raise funds and remove bad assets from the bank's balance sheet.  The FDIC can also sell off parts of the institution's business, meaning it could "break up one or more large, systemically significant institutions into several smaller, more manageable banks." The process has worked in the past -- and more than a dozen times so far this year -- without consumer panic, the COP noted, because of the FDIC's long-standing reputation as a conservator. The liquidation method has its drawbacks, as well, report authors said. "Some investors would nearly always be wiped out under liquidation or reorganization strategies," panel members noted in the report. "This is a harsh outcome, but the investors also reaped profits during the good times, for which they agreed to take the losses when things went sour." Time is of the essence The COP report acknowledged time as a continued essential factor in implementing any strategy -- management-ousting, asset-liquidating or other. A fast implementation and clear exit strategy are necessary goals, but the question remains whether "time is on our side," panel members said. "If, with the passage of time, assets will be restored to their earlier, true values and banks will come back to life on their own accord, then time is on our side," panel members wrote. "In such a case, the risks of action likely outweigh the risks of inaction." But the banking system itself could pose a timing issue, if the economy does not recover on its own, taking away the possibility of banks relying on a natural recovery of their balance sheets. Such a scenario could lead to indefinite reliance on federal funds, particularly by financial weak banks and institutions, the COP report noted. "The existence of weak institutions that are sustained only by taxpayer guarantees and infusions of cash threatens the health of all banks, drawing off depositors and undermining public support," the COP report reads, in part. "Continued operation of systemically significant but weakened institutions at the heart of a nation’s financial system may prevent a robust economic recovery of the sort that would cause time [to] be on our side. In such a case, delay and half steps would seem to be the main enemy." The Treasury has faced considerable criticism in recent months, not only for a combination of such "half steps," but for an overall lack of transparency in reporting details of its programs, goals and total funding initiatives. It's an issue that doesn't appear to be lost on the panel. In a late-March letter, COP chairwoman Elizabeth Warren chided the Treasury's "lack of responsiveness" with regards to the recent public/private investment fund program (PPIP) announcement, details of which were not immediately provided to the panel, although it had previously requested details on all relevant programs. "It is unacceptable," Warren wrote. "...Information from the Treasury...should be readily available to the Congressional Oversight Panel, and your failure to cooperate jeopardizes the credibility of the recovery process." Read the report. Write to Diana Golobay at