The plan will provide help for homeowners and clean up the banking system.
How we got into this mess:
The causes of this crisis are many and complex, he said. Housing prices defied gravity and investors took risks they didn't understand. People and businesses borrowed beyond their means. When the crisis began, government was chasing it. Government was behind the curve and added to the anxiety and failure. Investors pulled back. Last fall, the government pulled the banks from catastrophic failure but it wasn't enough. Americans' distrust turned to anger. Our challenge is greater today because Americans have lost faith in government.
To restore faith of the American people:
Policy has to be comprehensive and forceful. Action has to be sustained - can't apply breaks to early. Transparency. We need to mobilize and leverage private capital.
The new plan will pull all financial agencies together.
Financialstability.gov will provide transparency, where contracts will be posted.
1) Banking institutions will go through a stress test to see if they're strong or weak.
2) Work with FDIC and other agencies to form a private/public fund for the bad debts. How the assets are valued is still being designed.
3) Get the banks lending again. For small businesses, we're going to up the SBA loans.
4) We will launch a housing program, the details of which will be announced in the next few weeks.
All of the financial agencies helped shape the plan, he said. It will require more "resources" (money). Geithner will be in Italy meeting with G7 partners to work on the global financial system. We will work with the IMF.
Most of the programs I've discussed involve very large numbers. The plan will cost money, involve risk and it will take time.
Obama will be answering stimulus questions in Fort Myers at noon.
Geithner's opposition. More reaction from NYT to the bailout. Stocks are down. Wall Street says it wants details. Geithner's speech didn't provide enough meat.
How we got into this mess:
The causes of this crisis are many and complex, he said. Housing prices defied gravity and investors took risks they didn't understand. People and businesses borrowed beyond their means. When the crisis began, government was chasing it. Government was behind the curve and added to the anxiety and failure. Investors pulled back. Last fall, the government pulled the banks from catastrophic failure but it wasn't enough. Americans' distrust turned to anger. Our challenge is greater today because Americans have lost faith in government.
To restore faith of the American people:
Policy has to be comprehensive and forceful. Action has to be sustained - can't apply breaks to early. Transparency. We need to mobilize and leverage private capital.
The new plan will pull all financial agencies together.
Financialstability.gov will provide transparency, where contracts will be posted.
1) Banking institutions will go through a stress test to see if they're strong or weak.
2) Work with FDIC and other agencies to form a private/public fund for the bad debts. How the assets are valued is still being designed.
3) Get the banks lending again. For small businesses, we're going to up the SBA loans.
4) We will launch a housing program, the details of which will be announced in the next few weeks.
All of the financial agencies helped shape the plan, he said. It will require more "resources" (money). Geithner will be in Italy meeting with G7 partners to work on the global financial system. We will work with the IMF.
Most of the programs I've discussed involve very large numbers. The plan will cost money, involve risk and it will take time.
Obama will be answering stimulus questions in Fort Myers at noon.
Geithner's opposition. More reaction from NYT to the bailout. Stocks are down. Wall Street says it wants details. Geithner's speech didn't provide enough meat.
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Transcript
