WASHINGTON — The Treasury Department is selling its financial stakes in bailed-out banks for one-third less than they're worth, potentially shorting taxpayers up to $2.7 billion, a bipartisan congressional watchdog said Friday.

Treasury countered by noting that banks, including JPMorgan Chase & Co., think the department's asking prices are too high. Unable to agree on a price, some institutions are letting the department sell the warrants in public auctions.

While risky for both sides, the auctions give Treasury political cover amid growing criticism that its policies are too easy on big banks.

The shortfall estimated by the Congressional Oversight Panel concerns warrants, financial instruments that allow Treasury to buy shares of the firms at a set price in 10 years. If the stock prices of the banks go up, as they are expected to do, taxpayers could reap a healthy profit.

Treasury obtained the warrants when it began injecting billions into the nation's largest financial institutions in October. They were considered a "deal-sweetener" — a way to help taxpayers benefit from the upside of a financial recovery that depended on billions of federal dollars.

Many large banks received permission to exit the program far earlier than was initially expected. Last month, Treasury announced that 10 of the nation's largest banks — including JPMorgan, Goldman Sachs and Morgan Stanley — could repay about $68 billion of bailout money.

Twenty-two smaller banks have repaid their bailout money, and 11 of those have repurchased their warrants. If the warrants for those firms "had been sold for their true market values, taxpayers would have recovered $10 million more," according to a report Friday from the Congressional Oversight Panel, which was created by Congress to oversee the $700 billion bailout fund.

The warrants were sold at a one-third discount over their true prices, according to the panel's study. If warrants in the more than 600 banks participating in the bailout were sold at such a discount, that would mean taxpayers received $2.7 billion less than the panel estimates the warrants are worth.

Treasury last month announced a method for valuing the warrants through negotiation with the banks. The agency's offers reflect financial modeling and surveys of market participants.

The government also can sell the warrants in auctions instead of negotiating the prices. The panel said Treasury should consider holding open, public auctions to stop "any speculation about whether Treasury has been too tough or too easy on the banks."