Senate confirms bank bailout program watchdog

WASHINGTON (Reuters) - The U.S. Senate on Monday unanimously confirmed an assistant U.S. attorney from New York to be the internal watchdog of the government's $700 billion bank bailout program.

Neil Barofsky, currently an assistant U.S. attorney in the Southern District of New York, would oversee the Troubled Assets Relief Program, or TARP, at the Treasury Department put in place to help the struggling financial services sector. President George W. Bush nominated Barofsky for the position last month.

Barofsky's confirmation was advancing unhindered until an unnamed U.S. senator blocked approval of the selection. The senator lifted the opposition last week.

"Strong oversight of the program remains critical, including having an independent watchdog located at Treasury that will focus on taxpayer interests and guarding against fraud and abuse," Republican Sen. Judd Gregg of New Hampshire said in a statement.

The financial bailout program has been criticized by some lawmakers who have accused banks that received TARP money of hoarding it instead of lending it to businesses and consumers to ease the credit freeze.

Last week, the Government Accountability Office said the Treasury Department has not yet determined if it will impose reporting requirements on participating banks so that the government can monitor how federal funds are being used.

The congressional watchdog recommended Treasury develop ways to ensure participating banks comply with key TARP conditions as well as report whether financial institutions are fulfilling the bailout's goals.

(Reporting by Christopher Doering, editing by Philip Barbara)