By Rebecca Christie
Jan. 25 (Bloomberg)
The U.S. financial-rescue program will be “very different” under President Barack Obama than it was under his predecessor, said Lawrence Summers, director of the White House’s National Economic Council.
“The priority is to get credit flowing again,” Summers, appearing on NBC’s “Meet the Press” today, said of the second half of the $700 billion Troubled Asset Relief Program. “It’s going to emphasize transparency, it’s going to emphasize accountability.” (Does this mean that the Federales will respond to the FOI lawsuits and admit that they are shocked, shocked to find out that some collateral is missing? - AM)
Summers indicated that Obama’s strategy for stabilizing financial firms will be announced soon after Timothy Geithner, the nominee to be Treasury secretary, takes office. Majority Leader Harry Reid last week said he wants the full Senate to consider Geithner’s nomination tomorrow around 6 p.m.
“Perhaps most importantly, the focus isn’t going to be on the needs of financial institutions,” (Hmmmm this is quite promising - AM) Summers said. “Of course we need to stabilize financial institutions -- without a stable financial system the economy can’t work -- but the priority has to be getting credit flowing again so that people can buy cars, so that people can get mortgages, so the economy will operate.”
Summers said it wasn’t clear whether more money would be needed beyond the current TARP funding, noting that the financial system has “very serious problems” in need of attention.
“We can make important progress and get started with the support that has been provided,” Summers said.
Summers said banks need to lend more while also making sure to stay solvent.(Did he just use the S word? Oh my oh my. - AM) It wouldn’t be “responsible” for a bank that doesn’t have investor confidence to boost lending without having enough capital, he said.
“That’s why there needs to be more capital in the system,” Summers said. (The vaguer you are, the cheaper the cost... - AM)