Geithner says he's getting close on plan for toxic loans
Hurry up and keep waiting: The plan to deal with banks' rotting loans isn't quite ready but will be "in the next couple weeks," Treasury Secretary Timothy F. Geithner promised Tuesday.
That won't help his battered image, as parodied in a "Saturday Night Live" skit last weekend. The bit featured actor Will Forte as Geithner, holding a call-in show to offer $420 billion to the person who comes up with a solution to the banking crisis. (It’s the second video, here.)
The real Geithner said on "The Charlie Rose Show" on Tuesday that the Treasury’s plan, as expected, would provide government financing to private investors willing to buy toxic assets from the banks, the Associated Press reported. The goal: unburden the lenders so they can get back to the business of extending credit.
"We're going to move in the next couple weeks to lay out the precise terms of this facility," Geithner said. "People will see how it's going to operate. And then it will go into place over the following weeks and months."
Geithner said the government loans would carry interest rates that would support lending during a crisis but not be on such favorable terms that the investors buying up the toxic assets would want to keep borrowing from the government when the economy starts to improve.
"We think we can make a meaningful difference in starting to open up these markets," Geithner said. "There's capital that wants to come into the system but just can't get financing."
Details, details -- that's what investors want, and soon. Otherwise, let's just put Will Forte in charge. At least he was honest enough to say he didn't have a plan.
-- Tom Petruno
Photo: Treasury Secretary Timothy Geithner on Capitol Hill last week. Credit: Shawn Thew /European Pressphoto Agency