in their own words
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 Framing This Thing - Press Briefing by Treasury Secretary Timothy Geithner 3/23/09 — Monday, March 23, 2009 —  Q Looking at the example you give in the fact sheet -- the first program -- you start with talking about $100 in bank loans, but the private investor only has to kick in $6 for -- seems to be on the hook for $6 at the end of the day, and the FDIC guarantees between there and whatever was paid for the bad loan.Do you think a person outside this room, outside the Beltway, looking at that would feel like that's a -- you know, you've gotten a good deal by getting someone to kick in $6 for a loan that is valued at a $100, that's being purchased for $84. SECRETARY GEITHNER: I'm very confident you and your colleagues will do a good job of framing this thing -- (laughter) -- but let me just come back to the basic point. Okay? The point is, relative to what? What our job is, is to try to fix this problem in our financial system at least cost to the taxpayer and ways to get the incentives right so we can have private capital come in and not have the government do all of it. And the alternative strategies would have the government either taking on all that risk ourselves, having all those losses on our balance sheet -- or, sitting back and letting this process of deleveraging continue to weigh on the American economy, pushing viable businesses closer to the edge, where they have to shrink their businesses to get through this. And that's not an alternative we're prepared to support. The key thing is, again, that you -- people have to compete for the right to get access to financing in this context and they have to put money at risk for it to work. Yes. Q Can you clarify under both plans who is actually holding the assets at the end of the day, and explain to taxpayers what the upside is to all of that? How are they going to share in the upside of this program? SECRETARY GEITHNER: These funds -- purchase assets -- they're managed by professionals who know how to do this for a living. If there is a return to these over time, which we expect there will be, taxpayers will share in that return. So taxpayers are getting to take the benefits of providing this financing to the market. Now, of course investors will share, too, in that return, as you would expect. That's the simplest way to describe it I think. Banking | Economy | Press Briefing | TARP | Treasury Department | Treasury Secretary Timothy Geithner Labels: Banking, Economy, Press Briefing, TARP, Treasury Department, Treasury Secretary Timothy Geithner
Posted by White House Press Corps @ 4:08 PM
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