Archive for the ‘bad bank’ Category

Geithner, Bernanke work on $700B bailout overhaul

January 31, 2009

Treasury Secretary Timothy Geithner, Federal Reserve Chairman Ben Bernanke and other top banking officials met Friday to hammer out details of a major overhaul of the government’s financial rescue program. One official said the Obama administration was close to unveiling the new plan.

This senior administration official, who spoke to The Associated Press, said the administration was on track to announce its overhaul of the $700 billion bailout program soon, possibly as early as next week.

US President Barack Obama, seen here on January 29, 2009, sits ... 
US President Barack Obama, seen here on January 29, 2009, sits alongside Treasury Secretary Timothy Geithner (L) during meetings in the Oval Office of the White House in Washington, DC. President Barack Obama and China’s President Hu Jintao Friday agreed to forge “more positive” ties between their giant nations in their first telephone call since the US leader came to power.(AFP/File/Saul Loeb)

This official, who spoke on condition of anonymity because the plan has not yet been unveiled, said that it would employ a full range of tools to get credit flowing again to families and businesses.

While there had been reports that the administration may decide against setting up a government-run bank known as a bad bank to purchase toxic assets, this official said the administration was still developing the part of the plan to deal with toxic assets and no final decisions had been made.

The administration is working on proposals for how it will use the last $350 billion from the rescue program. Some of the measures being considered could end up costing taxpayers hundreds of billions of dollars beyond the original $700 billion pricetag.

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