The Geithner Plan

The Washington Post:

Treasury Secretary Timothy F. Geithner this morning announced an aggressive and multi-faceted program that could commit $1.5 trillion or more in public and private funds to rescue banks and financial institutions and thaw frozen credit markets.
The gravity of the financial crisis confronting the Obama administration was brought into stark focus as Geitner unveiled a financial stability plan that would more closely scrutinize the risks banks are facing and offer public and private capital to those that need it; create a fund, with a starting value of $500 billion, to buy up toxic real estate loans; and commit up to $1 trillion to reopen lending markets for consumer, student, small business, auto and commercial loans.
Geithner said the administration was also working on a plan to address the nation’s housing crisis by bringing down mortgage payments and reducing interest rates. President Obama, appearing at a town hall meeting in Fort Myers, Fla., said he would personally outline the details of that plan within the next few weeks.
Geithner did not ask Congress for more funds than the roughly $350 billion that remain in the Treasury Department’s original rescue package for the financial system. He said the balance of the money for the stability plan would, for now, come from other government agencies, such as the Federal Reserve, as well as private-sector contributions.
“To get credit flowing again, to restore confidence in our markets, and restore the faith of the American people, we are fundamentally reshaping the government’s program to repair the financial system,” Geithner said. ” . . . We believe that the policy response has to be comprehensive, and forceful. There is more risk and greater cost in gradualism than in aggressive action.”

Posted by on February 10th, 2009 at 2:01 pm


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