With the administration making a full court press to get the economic stimulus package through Congress, Treasury Secretary Timothy Geithner is delaying his plans to spell out details of the upcoming
bank rescue plan, now dubbed the
Financial Stability and Recovery Plan.
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On Sunday, the Treasury Department posted a statement,
saying "economic officials Administration-wide will be working
and consulting with senators throughout the day" Monday. Therefore, "
Secretary Geithner will postpone the release of the
Administration's Financial Stability and Recovery Plan until Tuesday to
allow for that to happen."
Major portions of the plan have already leaked out though. They
include new capital injections into banks and expansion of a Federal
Reserve program for consumer and small business to include real estate
assets.
The Deal's Bill McConnell
writes:
Geithner's new plan appears designed to stem the
government's up-front costs to the federal budget but could
nevertheless expose taxpayers to as much as $2 trillion in potential
obligations to the financial industry. The initial outlays and need for
immediate funding from Congress are expected to be stemmed by primary
reliance on new guarantees to banks rather than purchases of their bad
assets.
Keeping the up-front price for the bailout plan as low as possible
would increase Geithner's chances of winning congressional approval --
particularly after a furious debate over a nearly $1 trillion economic
stimulus package the week of Feb. 2.
Also under debate is a potential "bad bank" plan, which could purchase
the billions in toxic assets clogging up the balance sheets of the
banks. However, the huge price tag and lack of clarity on value for the
assets makes the plan a hard sell to lawmakers.
The greatest danger may lie in what the plan does not say.
Should financial institutions think that the plan is incomplete, there
is the risk that markets will slow to a standstill as they wait for the
other shoe to drop. -
George White
See Treasury statement
See Deal Pipeline story on bailout
Comments
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