No word yet on a reach around from Frank
Frank Is ‘Open’ to Increasing U.S. Bailout’s Size (Update1)
Jan. 27 (Bloomberg) — House Financial Services Committee Chairman Barney Frank said he would consider expanding the $700 billion financial-rescue fund, and expects the Obama administration will soon address banks’ toxic assets.
“I am open to that if they can demonstrate the need for it,” Frank told reporters in Washington today when asked if he’d approve a request to enlarge the Troubled Asset Relief Program. “I do think they will be addressing fairly soon the question of what you do about the bad assets” on banks’ balance sheets, he said.
Frank’s remarks indicate a growing recognition among lawmakers that President Barack Obama’s economy team will need more than the $350 billion of TARP that has yet to be committed. House Majority Leader Steny Hoyer said last week he “would not be surprised” at a request for an increase.
Frank said he expects to begin working with Treasury Secretary Timothy Geithner “immediately” on rules to stabilize the banking system, including a plan to buy soured mortgages.
Congress this month released the remaining $350 billion of TARP funds to the Obama administration. Frank and other congressional leaders have faulted former President George W. Bush and his Treasury Secretary Henry Paulson for not using the initial $350 billion released in October to stem foreclosures and spur lending.
Frank said he’d consider releasing more funds if the Obama administration showed “that there is a problem, that what they’re doing is helping alleviate the problem and that they’re doing it in a way that is supportable.”
Administration officials and banking regulators are considering ideas including setting up a “bad bank” to remove the toxic assets curbing banks’ ability to make new loans. Geithner, who was sworn in yesterday as Treasury secretary, last week pledged “much more substantial action” on a “very dramatic scale” to repair the financial system.
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