Geithner to Reveal More on Bank Bailout Next Week
Charlie Gasparino
Treasury Secretary Timothy Geithner is preparing to release more details of his bank bailout plan early next week, according to a source familiar with the talks.
The reason is pressure is building for more details from the financial community, this person says.
Wall Street executives have been on edge about the Treasury Department's plan since Geithner's dismal performance last Tuesday, and what they believe was over promising and under delivering on the bad bank.
Geithner is reacting to this criticism by moving details of his plan earlier than he planned knowing the market is demanding some more clarity on the bailout, according to Wall Street sources.
Under the plan released by Geithner last week there is a renewed effort to get bad assets off bank books, but it set aside a proposal to make direct purchases through the formation of a giant government “bad bank” to warehouse these assets until they recover some value. Instead the Treasury — possibly in conjunction with the Federal Reserve — will set up an "aggregator bank” and try to get private investors to step up and buy these assets.
But there remain questions about how exactly this will work and how the private investors will be convinced to put up that much money.
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