Top U.S. policy makers say tentative $700 billion rescue plan set
By Daniel at 28 September, 2008, 8:19 am
--------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------
TEL AVIV (MarketWatch) — U.S. policy makers, working through Saturday night into
Sunday, said they’d outlined a plan to rescue the financial system but needed to
put it on paper before saying that they had a final deal, The Wall Street Journal
reported Sunday.
Treasury Secretary Henry Paulson, House Speaker Nancy Pelosi, and Senate Majority
Leader Harry Reid stood with top negotiators to announce the tentative accord on
a $700 billion plan to have the Treasury purchase bad assets, the Journal
reported.
Under the plan, the Treasury Department would buy distressed mortgage-backed
securities and other bad debts held by banks and other investors. The funds would
help lenders make loans and keep credit lines open, the Journal reported. The
government would then sell the securities at the best price it could get.
The plan, announced after midnight U.S. Eastern Time Sunday and probably to be
made official later Sunday, is likely to limit executive compensation for some
companies and to give the U.S. government authority to take equity in companies
that sell bad assets under the plan, the Journal reported.
Sen. Reid said that an idea from Rep. Pelosi broke a negotiating deadlock, the
Journal reported. She and other negotiators agreed on provisions that would
enable the federal government to recoup money for taxpayers if the asset-purchase
program wasn’t making money after a certain period.
One proposal that both conservative House Democrats and Senate Democrats have
floated is to create a deposit-insurance fund similar to the one operated by the
Federal Deposit Insurance Corp. for bank accounts, the Journal reported.
A Senate aide told the paper that provisions were under discussion to address
such concerns, mainly by assessing fees on a wide group of financial institutions
to create a privately funded rescue fund to pay for any future and current
bailouts.
--------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------
No comments yet.