Wednesday, February 18, 2009

Late Change in Course Hobbled Rollout of Geithner's Bank Plan

Here is a novel idea. How about they start classifying banks. Identify the banks that need to be privatized, banks that need some help and can survive, and the banks that need nothing and are good to go.

Of course, politicians have already proved by forcing banks to take TARP money that they are unwilling to call a spade a spade.

I guess we wait until the next bank explodes and then try to throw some money at the problem and a box of bandages.

Just days before Treasury Secretary Timothy F. Geithner was scheduled to lay out his much-anticipated plan to deal with the toxic assets imperiling the financial system, he and his team made a sudden about-face.

According to several sources involved in the deliberations, Geithner had come to the conclusion that the strategies he and his team had spent weeks working on were too expensive, too complex and too risky for taxpayers.

They needed an alternative and found it in a previously considered initiative to pair private investments and public loans to try to buy the risky assets and take them off the books of banks. There was one problem: They didn't have enough time to work out many details or consult with others before the plan was supposed to be unveiled.

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