“The definition of Financial Institution should be as broad as possible,” the Financial Services Roundtable, which represents big financial services companies, wrote in an e-mail message to members on Sunday.
The group said a wide variety of institutions as varied as mortgage lenders and insurance companies should be able to take advantage of the bailout, and that these companies should be able to sell off any investments linked to mortgages.
The scope of the bailout grew over the weekend. As recently as Saturday morning, the Bush administration’s proposal called for Treasury to buy residential or commercial mortgages and related securities. By that evening, the proposal was broadened to give Treasury discretion to buy “any other financial instrument.”
The lobbying became particularly intense because Congress plans to approve a package within just two weeks, without the traditional hearings and committee process.
“Of course there will be fierce lobbying,” said Bert Ely, a financial services industry consultant in Alexandria, Va. “The real question is, Who wouldn’t want to be included in the package?”
Mr. Ely said the open-ended nature of the Treasury’s plan could be interpreted to mean that the government was open to acquiring “any asset, anywhere in the world.”
“The question that I am raising — is there any limit?” Mr. Ely said.
Each part of the financial industry is pursuing its own interests.
Small banks, for example, are pushing the government to buy loans they made to home builders and commercial developers. Wall Street banks are lobbying to temporarily suspend certain accounting rules to avoid taking big losses on the assets they sell to Treasury, which would weaken them further.
Over the weekend, the Securities Industry and Financial Markets Association, Wall Street’s main trade and lobbying group, held conference calls to discuss “your firms’ views and priorities related to Treasury’s proposal,” according to an e-mail message sent to members.
One of the calls addressed the fact that municipal securities were not included in the proposals released at the end of last week. Some bankers are pushing for government support of those securities as part of a broader effort to restore investor confidence in money market funds.
The group also discussed which securities would be eligible to be sold to Treasury. Under the latest proposal, the government would buy securities issued on or before Sept. 17.
But some bankers debated whether the cutoff date should be December 2007, when the market was clearly seizing up, to avoid bailing out those who bought securities recently. Other firms hope to be hired to manage the assets that Treasury acquires, a job that could earn them $1 billion a year, even if they charged fees that were modest by industry standards. Among them are the asset management companies Pimco and BlackRock. Morgan Stanley , the investment bank, is also vying for the work.
Some private equity firms, including the Blackstone Group, may be interested in pursuing an asset-management assignment from the government, people briefed on the matter said. Such firms have already expressed interest in buying up distressed debts after having bet against them early last year.
That raises complications because those firms hold assets similar to the ones the Treasury plans to buy. Democrats suggested on Sunday that a provision be added to avoid any conflicts of interest, with a firm making money from handling assets like its own.
William H. Gross, chief investment officer of Pimco, which manages about $830 billion in assets, would like to be an asset manager for the government but said he had not been in touch with Henry M. Paulson Jr., the Treasury secretary, over the weekend. Mr. Gross is among the financial executives Mr. Paulson, who previously headed Goldman Sachs, has regularly consulted with since the financial crisis began.
Another contender is Morgan Stanley, which advised Treasury on an unpaid public service basis on its takeover of Fannie Mae and Freddie Mac and on the American International Group , the insurer that the Federal Reserve agreed to lend $85 billion to last week in consultation with the Treasury Department.
Similarly, Bank of New York Mellon and JPMorgan Chase , which bought Bear Stearns in a deal brokered by the Federal Reserve and the Treasury Department, were also campaigning for a spot.
BlackRock, a big New York asset management firm, was also involved in negotiations with the government, people briefed on the matter said. The firm is already managing $30 billion of Bear Stearns mortgage assets for the Fed, and it has done work for Fannie Mae, Freddie Mac and A.I.G. A BlackRock spokeswoman declined to comment.