Treasury Secretary Henry Paulson delivered a game-changing proposal for a new RTC-type assistance package to solve the toxic loan problem plaguing the banks and the economy. Interestingly, Paulson frames this as a pro-growth measure. I agree. So does the soaring stock market.
Here’s the release:
Click here for the full release.
Statement by Secretary Henry M. Paulson, Jr. on
Comprehensive Approach to Market Developments
Washington, DC – Last night, Federal Reserve Chairman Ben Bernanke, SEC Chairman Chris Cox and I had a lengthy and productive working session with Congressional leaders. We began a substantive discussion on the need for a comprehensive approach to relieving the stresses on our financial institutions and markets.
We have acted on a case-by-case basis in recent weeks, addressing problems at Fannie Mae and Freddie Mac, working with market participants to prepare for the failure of Lehman Brothers, and lending to AIG so it can sell some of its assets in an orderly manner. And this morning we’ve taken a number of powerful tactical steps to increase confidence in the system, including the establishment of a temporary guaranty program for the U.S. money market mutual fund industry.
Despite these steps, more is needed. We must now take further, decisive action to fundamentally and comprehensively address the root cause of our financial system’s stresses. …