WASHINGTON – Treasury Secretary Timothy Geithner could announce as soon as Monday his much-anticipated plan to get toxic assets off the books of the country's struggling banks, administration and industry officials said.
The plan will use the Federal Reserve and the Federal Deposit Insurance Corp. to make the resources of the government's $700 billion financial rescue fund go further, the officials said Friday.
Geithner is being forced to tap the Fed and the FDIC for support because the prospects for getting additional money from Congress for the bailout effort have dimmed significantly given the recent uproar over millions of dollars in bonuses provided to troubled insurance giant American International Group Inc., the largest recipient of government support.
The officials, who spoke on condition of anonymity because they were not authorized to speak publicly about Geithner's plan, said it will have three major parts.
One program will use the bailout fund to create a public-private partnership to back purchases of bad assets by private investors.
A second portion of the plan will expand a recently launched program being run by the Federal Reserve called the Term Asset-Backed Securities Loan Facility, or TALF. That program is providing loans for investors to buy assets backed by consumer debt in an effort to make it easier for consumers to get auto, student and credit card loans. Under Geithner's proposal, this program would be expanded to support investors' purchases of banks' toxic assets.
The third part of the Geithner plan would utilize the resources of the FDIC, the agency that guarantees bank deposits, to purchase toxic assets.
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1 comment:
Ok I wrote Tim Geithner and yes he answered so he's ok with me. As for his job well he should be labled superman as he has a mess on his hands as was planned by the Bush Administration. The delay in his confirmation was done to make sure he would have problems. He doesn't have the staff needed to do the job so he's doing it himself. As GOP Law Makers set around drinking and lying Tim is working 24/7. He has to go over every line done by the corrupt former qualified Hank Paulson. It's funny to hear Law Makers ask for him to resign when they were the ones who approved Bush's bill. Not one Law Maker read the Bill they were just paid to pass the Bill. Dodd is funny too as he got kick back money from CountryWide in the subprime scam and then acted like he didn't know it was illegal. If you take out a second mortage and you get an extra 200,000 dollars what would you think? Don't dare say the tooth fairy either.
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