- Congressman: McAuliffe victory means gun control a winning message
- Clinton aide admits soliciting disgraced D.C. fundraiser; says actions were legal
- Joel Osteen church victimized in $600K theft
- Obama goes shopping at Gap as minimum-wage thanks
- N.J. woman charged after client dies from black-market butt injections
- CIA chief Brennan ‘determined’ to speak out more this year
- Reset? What reset? U.S.-Russia ties at worst since Cold War
- 9/11 terror recruiter released in Syrian prisoner swap
- D.C. elections board gives green light to marijuana legalization initiative
- Elephants can tell difference between human languages: study
Bailout chief speaks, promises quick action
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.
Mr. Kashkari said contracts to track the troubled assets under the program, to manage the sale of mortgage-backed securities and to sell off the mortgage loans acquired by the government will all be awarded in the next few days.
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: A Rocky-like chess bout from the Romantic era
- SANDS: Going old school: Big chess milestones for 2014
- SANDS: If you knew Sochi like chess players knew Sochi
- SANDS: Chess champion Magnus Carlsen finally shows a little imperfection
- SANDS: Carlsen, Aronian set the pace at Zurich Chess Challenge
Latest Blog Entries
An America drowning in red ink is the land of the free no more
- Inside the Beltway: A new interest in Rahm Emanuel for 2016?
- Kim Jong-un calls for execution of 33 Christians
- Bill Clinton poses for photo with Bunny Ranch prostitutes
- David Jolly wins in Florida, GOP keeps swing district seat
- U.S. pilot scares off Iranians with 'Top Gun'-worthy stunt: 'You really ought to go home'
- 80 people publicly executed across North Korea for films, Bibles
- Liam Neeson tells NYC mayor to 'man up' in horse carriage fight
- House Democrats trying to force unemployment insurance vote
- Atheists sue to remove 'Ground Zero Cross' from 9/11 museum
- Florida lawmakers move to wipe corrupt 'Boss Hogg' town from map
Pope Francis meets his 'mini-me'
Celebrity deaths in 2014
Winter storm hits states — again