June 15th, 2009
02:37 PM ET
5 years ago

Geithner: Economy in 'early stages of repair'

 Tim Geithner called the nation's antiquated regulatory structure a 'spectacle.'
Tim Geithner called the nation's antiquated regulatory structure a 'spectacle.'

NEW YORK (Fortune) – The stock market's rally serves as "broad validation" of the Obama administration's financial rescue efforts, Treasury Secretary Tim Geithner said Monday.

But Geithner also stressed that the economy faces "an enormously challenging period ahead" - a view that was vigorously seconded by a panel of economic skeptics headlined by Nouriel Roubini, the economist known as Dr. Doom.

The comments came at an economic discussion sponsored by Time Warner, which is the parent company of Fortune and CNNMoney.com.

All of the panelists agreed the nation's financial regulatory apparatus is a mess, with Geithner calling the overlap among oversight agencies a "spectacle."

The administration is scheduled to outline its regulatory reform plan Wednesday. Geithner said the program, to be unveiled by President Obama, will result in a financial system that's more stable and more efficient. He added that avoiding future crises should make the finance business "a little less exciting."

Geithner said the financial system is in "the early stages of repair" following a round of capital-raising at big banks and other financial institutions.

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Filed under: Tim Geithner
March 6th, 2009
02:41 PM ET
3 years ago

Washington prepares for big bank failure

Sen. Dodd is backing a bill that would allow the FDIC to borrow up to $500 billion from the government.
Sen. Dodd is backing a bill that would allow the FDIC to borrow up to $500 billion from the government.

NEW YORK (Fortune) - The government is bracing for a big bank failure.

A bill introduced in Congress would give the FDIC, the agency that stands behind Americans' bank deposits, temporary authority to borrow as much as $500 billion from the government to shore up the deposit insurance fund.

The bill - the Depositor Protection Act of 2009, backed by Senate Banking Committee Chairman Chris Dodd, D-Conn. and Sen. Mike Crapo, R-Idaho –wouldn't change the status of individual bank accounts, which through the end of this year are insured up to $250,000.

But the Dodd-Crapo bill acknowledges what the financial markets have been signaling for the past month - that the government must take the lead in a costly cleanup of the mess in the financial sector.

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Filed under: Senate
March 5th, 2009
12:51 PM ET
6 years ago

Fed wants to keep AIG secrets

A Federal Reserve official told the Senate Banking Committee Thursday that firms who received public money as a result of AIG's bailout should not be disclosed.
A Federal Reserve official told the Senate Banking Committee Thursday that firms who received public money as a result of AIG's bailout should not be disclosed.

NEW YORK (Fortune) - Officials shouldn't reveal which Wall Street firms pocketed billions of dollars in the government's bailout of AIG, a top Federal Reserve official said.

Firms that did business with the troubled insurer did so "expecting confidentiality," Fed Vice Chairman Donald Kohn told the Senate Banking Committee in testimony Thursday.

He said publishing a list of the firms that benefited from government support of AIG - as lawmakers have been demanding - could undermine trust in the markets and increase financial instability.

"I would be very concerned if we started revealing lists of names of companies that did transactions" with AIG or with the government on AIG's behalf, Kohn said in response to questions. Doing so, Kohn added, could "undermine confidence" in the financial system.

The comment was met with incredulity by senators who said the government must do a better job explaining how its actions over the past six months have benefited all Americans, and not simply troubled big companies and their trading partners. AIG has received more than $150 billion in federal aid since its brush with bankruptcy last fall.

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Filed under: TARP
March 4th, 2009
02:41 PM ET
6 years ago

Congress wants AIG answers

Federal Reserve Chairman Ben Bernanke slammed AIG in testimony on Capitol Hill Tuesday.
Federal Reserve Chairman Ben Bernanke slammed AIG in testimony on Capitol Hill Tuesday.

(Fortune) - Lawmakers want to know who's pocketing the money taxpayers have spent to prop up AIG.

Rep. Carolyn Maloney, D-N.Y., on Wednesday demanded that Federal Reserve chief Ben Bernanke provide a full accounting of the firms that have received federal funds in their dealings with AIG (AIG, Fortune 500) since last fall's brush with bankruptcy.

The letter - which seeks to unmask the AIG trading partners that benefited from the billions of dollars the government has extended - comes a day after Bernanke expressed frustration with the firm, which has received more than $150 billion in federal help over the past six months.

"If there is a single episode in this entire 18 months that has made me more angry, I can't think of one other than AIG," Bernanke told the Senate Budget Committee Tuesday. "This was a hedge fund, basically, that was attached to a large and stable insurance company, made huge numbers of irresponsible bets - took huge losses. There was no regulatory oversight because there was a gap in the system."

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Filed under: Ben Bernanke • Congress • TARP