|  | | 2008 News and Press Releases | | |
HEADLINE NEWS:
Paulson Shifts Focus of TARP to Bolster Consumer-Lending Market
John Brinsley and Robert Schmidt
Bloomberg. November 12, 2008
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EXCERPT: Treasury Secretary Henry Paulson plans to use the second half of the $700 billion financial rescue program to help relieve pressures on consumer credit, scrapping an effort to buy devalued mortgage assets. ``Illiquidity in this sector is raising the cost and reducing the availability of car loans, student loans and credit cards,'' Paulson said in the text of a speech today in Washington. ``This is creating a heavy burden on the American people and reducing the number of jobs in our economy.'' Treasury and Federal Reserve officials are exploring a new ``facility'' to aid the market for securities backed by assets, Paulson said. Officials are considering using a portion of the bailout money to ``encourage private investors to come back to this troubled market,'' he said. The Treasury chief said the department is also considering having companies that accept new taxpayer funding get matching private capital. Buying ``illiquid'' mortgage-related assets is no longer being considered, he said. ``Our assessment at this time is that this is not the most effective way to use TARP funds, but we will continue to examine whether targeted forms of asset purchase can play a useful role,'' he said, referring to the Troubled Asset Relief Program. |
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