- Feds sue Pennsylvania State Police over women’s fitness tests
- Israel accused of striking U.N. school, killing at least 15
- Israel hits symbols of Hamas rule; scores killed
- Mississippi abortion law can’t be enforced
- Teacher who survived Sandy Hook has book deal
- Jury awards Jesse Ventura $1.8M in case vs. ‘American Sniper’ author Chris Kyle
- Middle Eastern firm’s deal to manage U.S. cargo port raises security concerns
- Bob McDonnell’s defense: Lonely wife developed ‘crush’ on CEO
- Chinese hackers stole ‘huge quantities’ of sensitive data on Israel’s Iron Dome
- House Republicans unveil bill to speed deportations of border children
Bailout chief speaks, promises quick action
Question of the Day
When you’ve got a $700 billion bankroll, you have no trouble filling a room.
In his maiden speech as the Bush administration’s bailout czar, Treasury Department official Neel Kashkari on Monday told an overflow crowd of international bankers that the government has already taken a number of steps to implement the emergency rescue package and begin rebuilding the U.S. financial system.
While the logistical problems are immense, “we don’t have months or years,” Mr. Kashkari said. “We are moving to implement [the rescue plan] as quickly as possible while working to ensure high-quality execution.”
President Bush signed the bailout legislation just 10 days ago. The program would spend up to $700 billion in taxpayer funds to clear up “toxic” mortgages and mortgage-related loans that have brought the country’s financial system to its knees.
The 35-year-old Mr. Kashkari, a top aide to Treasury Secretary Henry M. Paulson Jr., said U.S. regulators are considering several ways to spend the $700 billion, including, in some cases, having the government take direct ownership stakes in the banks who are helped out.
He said the Treasury will impose limits on executive compensation for banks and financial firms who benefit from the rescue operation, and said the government is anxious to include small business and women and minorities among the private contractors working on the program.
The equity purchase program, which Mr. Paulson originally resisted, “will be voluntary [for banks] and designed with attractive terms to encourage participation from healthy institutions,” he told the forum sponsored by the Institute of International Bankers.
A similar program, pushed by British Prime Minister Gordon Brown, has taken a much more aggressive tack. The British government Monday said it was purchasing a controlling share in Britain’s three biggest banks for $68 billion.
Mr. Kashkari revealed a number of details about his start-up operation. Five senior bureaucrats, drawn from the State Department, Federal Reserve and other agencies, have been recruited to help set up the new Office of Financial Stability on an interim basis.
The Troubled Asset Relief Program, or TARP, has seven policy teams dealing with buying troubled mortgages; buying mortgage-backed securities; setting up an asset insurance program for banks; making direct purchases of bank stocks; preserving homeownership; setting limits on executive pay; and oversight.
“Our goal is to use the multiple tools enabled by the TARP to attack the capital and troubled asset problem from multiple directions, so American families and businesses can get the credit they need,” Mr. Kashkari said.
But he gave no date on when the first deals would be struck and did not take questions from the audience after his prepared remarks, even with a long line of reporters and television cameras trailing behind him as the left the Georgetown hotel.
Bert Ely, an Alexandria-based financial industry consultant, said the speech left many key questions unanswered and many details hanging.
“We still don’t know exactly how they will buy the [bank] shares and assets, how they will determine the price and what kind of equity the government will be getting,” Mr. Ely said. “This is not going to roll out as fast as people think.”
The investment consulting firm Ennis Knupp & Associates won one of the program’s first competitive bids to review proposals from assets management firms and the law firm Simpson Thatcher & Bartlett will advise the Treasury on how to structure the program to buy ownership shares in troubled banks.
About the Author
Raised in Northern Virginia, David R. Sands received an undergraduate degree from the University of Virginia and a master’s degree from the Fletcher School of Law and Diplomacy at Tufts University. He worked as a reporter for several Washington-area business publications before joining The Washington Times.
At The Times, Mr. Sands has covered numerous beats, including international trade, banking, politics ...
- SANDS: Song soars with dramatic Cadet chess victory
- SANDS: Cadets battle as D.C. summer chess scene heats up
- SANDS: Winners take three paths to the top at the 42nd World Chess Open
- SANDS: Ortiz Suarez wins D.C., Smirin wins the World
- SANDS: Fourth time a charm as Troff captures U.S. junior chess title
Latest Blog Entries
- Boehner rules out impeachment: 'Scam started by Democrats'
- Obama thanks Muslims for 'building the very fabric of our nation'
- Obama's brother wears Hamas scarf bearing anti-Israel slogans in photo
- Smugglers, rainstorm combine to poke holes in border fence
- Tactical advantage: Russian military shows off impressive new gear
- Kerry's credibility questioned as fighting in Gaza rages
- Patent workers paid to exercise, shop, do chores: report
- Defense lawyer: McDonnell's wife had 'crush' on CEO
- McCLAUGHRY: Finish off the "Islamic State" quickly and cheaply
- Obama orders Pentagon advisers to Ukraine
Obama's biggest White House 'fails'
Celebrities turned politicians
Athletes turned actors
20 gadgets that changed the world