Healing Signs For U.s. Financial Sector
Testifying before the Senate Banking Committee, Mr. Geithner said that the financial system as a whole had begun to "heal" and that the Treasury Department would soon start the next financial rescue effort. The next financial rescue effort will be aimed to team up with the private investors to buy billions of dollars in toxic assets from banks.
Mr. Geithner added that the chances are flimsy but Obama administration is taking great caution in using its $700 -billion recovery fund. The fund was approved in last October by the Congress and is reduced to $123.7 billion. Geithner also hints that Government may pull out of its financing from other programs in order preserve the funds. But the lawmakers of both Republicans and Democrats complained that the dollar 700 billion bail out plan which was known as the Troubled Asset Relief Program (TARP), had yet to restore bank lending in many parts of the country.
Democrat lawmakers were against the attitude of the Treasury with aid recipients and several of them also complained that Treasury officials allowed General Motors expand its production capacity in China whereas it closed its manufacturing units here in US.
While describing the banking system Mr. Geithner said that America's largest financial institutions had managed to raise billion by issuing common stock and new debt, including $8 billion in bonds not guaranteed by the government.
Government Regulators reviewed the financial conditions of top 19 financial institutions, and said that 10 out of 19 institutions needed to raise a total of $75 billion additional capital to withstand losses if in case another economic crisis hit the nation. They added that banks could raise money privately, or convert their preferred shares to common stock.
According to the treasury officials they are expecting to recover around $ 25 billion as banks start to repay the loans they received under the bailout package aid or Troubled Asset Relief Program (TARP). Some of the lawmakers recommended using these funds in paying off U.S. debt.
Geithner was assured that only aggressive and strict steps can only prevent this financial crisis. He added that the government will remain flexible to exploring new solutions to the crisis.
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Mr. Geithner added that the chances are flimsy but Obama administration is taking great caution in using its $700 -billion recovery fund. The fund was approved in last October by the Congress and is reduced to $123.7 billion. Geithner also hints that Government may pull out of its financing from other programs in order preserve the funds. But the lawmakers of both Republicans and Democrats complained that the dollar 700 billion bail out plan which was known as the Troubled Asset Relief Program (TARP), had yet to restore bank lending in many parts of the country.
Democrat lawmakers were against the attitude of the Treasury with aid recipients and several of them also complained that Treasury officials allowed General Motors expand its production capacity in China whereas it closed its manufacturing units here in US.
While describing the banking system Mr. Geithner said that America's largest financial institutions had managed to raise billion by issuing common stock and new debt, including $8 billion in bonds not guaranteed by the government.
Government Regulators reviewed the financial conditions of top 19 financial institutions, and said that 10 out of 19 institutions needed to raise a total of $75 billion additional capital to withstand losses if in case another economic crisis hit the nation. They added that banks could raise money privately, or convert their preferred shares to common stock.
According to the treasury officials they are expecting to recover around $ 25 billion as banks start to repay the loans they received under the bailout package aid or Troubled Asset Relief Program (TARP). Some of the lawmakers recommended using these funds in paying off U.S. debt.
Geithner was assured that only aggressive and strict steps can only prevent this financial crisis. He added that the government will remain flexible to exploring new solutions to the crisis.
To know more about Loss Mitigation,loan loss mitigation, loan modification, home loan modification, mortgage modification visit : CDLoanmod.com
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