Geithner says bank plan now is in ‘consultation process’
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Treasury Secretary Timothy Geithner is trying to persuade Wall Street that patience really is a virtue.
Speaking to the Senate Budget Committee today, Geithner offered no apology for his failure on Tuesday to provide specifics about the Obama administration’s financial-system rescue plan. Investors’ disappointment triggered a dive of nearly 5% in most major stock indexes on Tuesday.
The market has stabilized today. The Dow Jones industrial average was up 0.8% at about 9 a.m. PST.
From Bloomberg News:
“I completely understand the desire for details and commitments,” Geithner told lawmakers. “But we’re going to do this carefully, consult carefully, so we don’t put ourselves in the position again” where there are “quick departures and changes in strategy,” he said. Officials yesterday said it may take months to set up the fund that will buy illiquid securities. No private investors have so far committed, they told reporters in Washington. The Fed has also yet to begin the effort to spark new lending by offering credit to investors in securities backed by new credit-card, auto and student loans. “This is the beginning of the process of consultation,” Geithner said today. Geithner’s plan also includes a $50 billion allocation to efforts to stem mortgage foreclosures. That strategy has also yet to be worked out. The Treasury chief is scheduled to meet on the matter later today with industry representatives and Housing and Urban Development Secretary Shaun Donovan. “In the next few weeks, the president and his team will outline a comprehensive program to help address the housing crisis, Geithner said. “Our focus will begin on using the full resources of the government to help bring down mortgage payments and help reduce mortgage interest rates.”
-- Tom Petruno