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Business this week

Sun, 03/29/2009 - 16:02
Mar 26th 2009
From The Economist print edition

Tim Geithner unveiled long-awaited proposals to deal with toxic assets. The American treasury secretary’s plan mixes a little private capital with a lot of public money to buy possibly as much as $1 trillion of the bad assets, which Mr Geithner hopes will “get the securities markets…working again”. Five private funds will be approved by the Treasury to manage the programme. Firms in the running, such as BlackRock and PIMCO, gave the plan a welcome. Stockmarkets had their best day in months. See article
Mr Geithner then testified to Congress along with Ben Bernanke, chairman of the Federal Reserve, and asked for powers to seize failing financial companies, similar to those that exist for taking control of banks. They said the lack of such authority to “unwind an institution of the size and complexity” of American International Group had forced the government to prop up the distressed insurer by taking an 80% stake. In a busy week, Mr Geithner went on to propose a broad overhaul of the regulations governing large hedge funds, private-equity firms and derivatives markets.

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