(Newser)
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Banks are proving so reluctant to part with their so-called “toxic assets” that the Obama administration may have to strong-arm them into doing so, Time reports. Banks are protesting that the prices being offered—about $70 per $100 bond by the magazine’s calculations—are too low. That’s part of the reason Treasury Secretary Tim Geithner decided to make the “stress tests” public, officials say.
Goldman Sachs, meanwhile, recently estimated that the industry’s best toxic assets are worth $91 per $100 bond. “The government dollars may not be enough to reduce the spread between the bid and the ask,” said one lobbyist. But regulators have long had the power to force balance-sheet clean-ups. “With the results of the stress tests in hand, it just gives you more leverage,” said a senior official.
