The Treasury Department is actually much more transparent today than it was 18 months ago but still must vastly improve, says Harvard professor Elizabeth Warren, chairwoman of the Congressional Oversight Panel for the Troubled Asset Relief Program (TARP).

But Treasury officials "have not given accurate assessments on what’s happening in certain programs like the mortgage foreclosure program,” Warren told Bloomberg.

The fact that 101 banks have yet to pay their TARP dividends troubles Warren greatly. “It’s a sign that there’s great instability in the banking system,” she says.

“Do you realize that 3,000 of our 8,000 banks have serious concentrations in commercial real estate, which we know is a coming problem?” she asks.

“We’ve got a lot of problems out there. A lot of banks have not yet digested their bad mortgages. This does not look like a problem that’s going to get smaller over the next couple of quarters. It looks like a problem that’s likely to increase.”

Treasury Secretary Timothy Geithner defended the government's bailout of the financial system during the hearing, saying it has been a "critical" part of the economic recovery and will ultimately cost less than expected, CNN Money reports.

While the economy remains challenged, Geithner said TARP and other "extraordinary actions" taken to combat the financial meltdown "have helped stabilize the financial system and restore economic growth."