Credit Crunch Pinches Entire Lending System

(NEWSER) - The current financial regulatory system “is riddled with gaps, weaknesses, and jurisdictional overlaps,” Treasury Secretary Timothy Geithner and Obama economic guru Larry Summers write in today’s Washington Post. They outline, in broad strokes, their plan to fix it:

• Capital and liquidity requirements will be raised across the board.
• “Too-big-to-fail” firms will be subject to supervision from the Federal Reserve and a council of regulators.

Three-part program will push investors to buy toxic assets

(NEWSER) - The Treasury unveiled its three-part Public-Private Investment Program today, reports the Wall Street Journal. Under the program, up to $100 billion in TARP funds will be partnered with private investments to buy troubled assets. The Treasury, Federal Reserve, and FDIC will work with hedge funds and private equity to try to restart the market, and taxpayers will gain if investments turn profitable. More»

Treasury sec lays out $1T plan in op-ed

(NEWSER) - Tim Geithner caps a weekend of lobbying for the administration's $1 trillion Public-Private Investment Program in an op-ed for the Wall Street Journal, arguing that "the financial system as a whole is still working against a recovery." For the Treasury secretary, all the previous measures will fail to work without this one, since "while this crisis was caused by banks taking too much risk, the danger now is that they will take too little." More»

Treasury will set 'floor price' on distressed assets to lure buyers

(NEWSER) - The Treasury's latest plan to rescue the banking industry relies heavily on private-sector investors, the New York Times reports. The government will guarantee a floor price on the toxic assets weighing down banks’ balance sheets, encouraging hedge funds, private equity groups, and even insurers to buy them. The plan should reduce the need for federal fundraising and mitigate the risk to taxpayers. More»

Adviser irked that Geithner, not he, has Obama's ear

(NEWSER) - Economics guru Larry Summers will be out the Obama administration by November’s election, or shortly thereafter, Joshua Green contends —mainly out of frustration that Treasury Secretary Timothy Geithner, and not he, has become President Obama’s go-to adviser in that area. Blogging for the Atlantic, Green notes that, after being passed over for the top spots at Treasury and the Federal Reserve, “Summers is frustrated by his role, and his colleagues are clearly frustrated with him.” More»