Henry Paulson, US Treasury Secretary, clashed with lawmakers in implementing the rest of TARP to prevent homeowner’s foreclosures as was proposed by FDIC chairman, Sheila Blair. Paulson argued that TARP is designed to stabilize financial market and the credit flow, not to panacea for all the economic problems.
The remaining $410 of the rescue package could be best utilized but he doesn’t plan to tap it unless a further need arises.
Even lawmakers pressured but Paulson still resisted. Paulson was urged to use its authority under the financial rescue package to curb foreclosures. Treasury initially planned to use leverage it would earn from buying residential loans and mortgage backed securities to encourage lenders to help troubled homeowners.
In the hearing, Fed Chairman, Ben Bernanke, told lawmakers that buying bank stakes is critical for restoring confidence and promoting the return of credit markets to more normal functioning.
Related Posts :
Sources :
- Bloomberg: Paulson, Democrats Clash on Bailout for Homeowners (Update2), November 18, 2008 13:00 EST
The Wall Street Journal: Paulson Will Keep Reserve to Stay Flexible for Future, November 18, 2008
Bloomberg Video: Video: Recap: TARP Testimony, November 18, 2008 12:06 pm EST
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