Washington (dpa) - The United States' dramatic efforts to stabilize the financial system are vulnerable to fraud and must include greater transparency and oversight to prevent abuses, a government investigator warned in a report to Congress Tuesday.

Nearly 20 criminal investigations of fraud have already been opened on institutions that took money from the government's 700- billion-dollar financial rescue package, according to a report by Neil Barofsky, the special inspector general charged with monitoring the bail-out efforts of President Barack Obama's administration.

The criminal probes include instances of public corruption, insider trading and mortgage-related fraud, but Barofsky did not say which companies or groups were being investigated.

The report warns that the initial financial rescue package approved by Congress in October had ballooned into a 3-trillion- dollar effort of "unprecedented scope, scale and complexity" together with the US Federal Reserve that was open to abuse.

Barofsky's report warned that a joint public-private programme announced by the Treasury to buy toxic mortgage assets at the heart of the downturn was "inherently vulnerable to fraud, waste and abuse."

Treasury Secretary Timothy Geithner, who testified before the Congressional Oversight Panel on the same day of the report's release, defended the government's efforts to pull the financial sector out of its worst crisis since the Great Depression.

Geithner said banks had begun to increase lending to consumers, while about 135 billion dollars from the initial 700-billion-dollar rescue package had yet to be used by the Treasury.

Some of the remaining funds could be used after a series of so- called "stress tests" on the country's largest banks are completed in the coming weeks, which will give the government a better idea of exactly how vulnerable financial firms still are to the credit crisis.

"Maintaining confidence in key financial institutions, particularly as they raise new capital and restructure, has to remain a central objective of financial policy," Geithner said.