The Obama administration delayed the announcement of its bank rescue plan until tomorrow as Congress remained focused on the economic stimulus package.
Details of the bank bailout plan were expected today, but the Treasury Department said Timothy Geithner will make the announcement at 11am EST on Tuesday. Details of the plan have been scarce, but it is expected that the Obama Administration’s use of the Troubled Asset Relief Program’s (TARP) remaining $350bn will seek to shore up the nation’s biggest commercial banks.
Efforts are being devoted to cleaning the bank’s toxic assets in addition to further equity investments in the banks themselves and guarantees on loans. It has even been suggested that there may be incentives for private investors to buy the troubled mortgage related assets which lie as the root cause of the current crisis and provide relief to troubled banks.
The administration has also pledged $50bn to $100bn will be used to help people with distressed mortgages. In addition to this, it is also designing a program that would ease borrowers’ mortgage payments to Fannie Mae and Freddie Mac and hopes it provides a model Wall Street will emulate.
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