Geithner: Here's how I'll wind down bailout
The taxpayer-funded bailout has been a success, but now it's time to narrow its focus and think about winding it down, Treasury Secretary Tim Geithner said in written testimony before the congressional oversight committee in charge of evaluating how the bailout is being spent.
You can read Geithner's entire testimony by clicking here. He began speaking moments ago.
In a letter to Congress on Wednesday, Geithner said he is extending the bailout, or TARP, until October 2010. You will recall the $700 billion bailout was authorized by Congress in fall of 2008.
Now, the debate is over what to do with the unspent bailout money, which I wrote about on Tuesday and which you can read by clicking here.
In his testimony today, Geithner laid out his four-point plan for winding down the bailout:
1. Terminating and winding down programs that have supported large financial institutions.
2. Limiting new investments to housing, small business and securitization markets that facilitate consumer and small business loans.
3. Maintaining the capacity to respond to potential financial threats.
4. Continuing to manage equity investments acquired through TARP in a commercial manner, while protecting taxpayers and unwinding those investments as soon as practicable.
"In sum, TARP has largely succeeded in achieving its primary goal, and we are winding down many initiatives established under the program," Geithner is saying. "However, four tasks remain for TARP: preserving financial stability, which is essential for long-term economic growth; mitigating foreclosure for responsible American homeowners; getting credit to small businesses; and supporting securitization markets that facilitate consumer and small business loans."
-- Frank Ahrens
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December 10, 2009; 10:23 AM ET
Categories: The Ticker | Tags: TARP, Tim Geithner, bailout
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