Treasury Chief Seeks Wider Power to Seize Troubled Firms

[hank scorpio]

WASHINGTON — The Obama administration is renewing calls for Congress to provide new authority to take over financial institutions in distress, expanding its existing powers to include insurance companies and other less-regulated market players.

“The United States government does not have the legal means today to manage the orderly restructuring of a large, complex non-bank financial institution that poses a threat to the stability of our financial system,” the Treasury secretary, TimothyF. Geithner said in a statement prepared for delivery before the House Financial Services Committee.

http://www.nytimes.com/2009/03/25/busin ... ml?_r=1&hp

I say yes indeed, non-bank institutions obviously affect us the same way as banks, more so in many cases. AIG, CitiBank, other holding companies, and hedge funds need to be regulated. Or when necessary, taken over by the government and dismantled in an orderly fashion.

If you don't agree, lick my butt!*

Discuss

Oh, and have a nice day!

*borrowed from Wedgie

[Ivytalk]

Danke schon, Herr Geithner!

[dbackjon]

I think this is a good thing.

[wideright82]

oh..... they aren't joking

[Ivytalk]

I don't like the idea. It's a slippery slope. What objective test will be used to determine whether a failing company is so closely tied to the "financial system" that a government takeover is authorized? What about The Hartford, another troubled insurance company? General Motors, whose bankruptcy could have "ripple effects" on the economy? Barney Frank, Chris Dodd and company sure aren't "wasting a crisis" on this one.

[dbackjon]

I don't like the idea. It's a slippery slope. What objective test will be used to determine whether a failing company is so closely tied to the "financial system" that a government takeover is authorized? What about The Hartford, another troubled insurance company? General Motors, whose bankruptcy could have "ripple effects" on the economy? Barney Frank, Chris Dodd and company sure aren't "wasting a crisis" on this one.

That is a good point, Mr. Councelor. Maybe the barriers that used to be in place between banks and other services should be re-erected.

Or, if your company is involved in "x" sectors, then you fall under the new rules.

[Ivytalk]

I don't like the idea. It's a slippery slope. What objective test will be used to determine whether a failing company is so closely tied to the "financial system" that a government takeover is authorized? What about The Hartford, another troubled insurance company? General Motors, whose bankruptcy could have "ripple effects" on the economy? Barney Frank, Chris Dodd and company sure aren't "wasting a crisis" on this one.

That is a good point, Mr. Councelor. Maybe the barriers that used to be in place between banks and other services should be re-erected.

Or, if your company is involved in "x" sectors, then you fall under the new rules.

You mean re-enact Glass-Steagall? Hmmm...interesting! Maybe they should have started the debate with that proposal.

[dbackjon]

That is a good point, Mr. Councelor. Maybe the barriers that used to be in place between banks and other services should be re-erected.

Or, if your company is involved in "x" sectors, then you fall under the new rules.

You mean re-enact Glass-Steagall? Hmmm...interesting! Maybe they should have started the debate with that proposal.

See, this is how you get things done. Propose some so radical that firms will gladly "compromise" reenacting Glass-Steagall

[ChetSteadman]

This is a scary proposition. I don't like giving anyone the power to do something like dismantle companies on a whim, so I'd want to see some major checks and balances put in place before I would ever think this is a good idea.

[ASUMountaineer]

My question to the administration is: What happens when you're no longer in power and some hardened, free wheeling, free market capitalist scum gets the reigns of power to do this? Oh nevermind, I forgot Geithner used to be head of the NY Fed. Carry on, business as usual, nothing to see here.

Of course I'm against this, how long until we let the Treasury have full control of other industries? Business owners, how does this make you feel?

[hank scorpio]

Geithner calls for new risk watchdog

WASHINGTON (Fortune) -- Treasury Secretary Tim Geithner called for new rules Thursday that would allow regulators to police the darkest corners of the financial markets, including big hedge funds and derivatives trading.

The U.S. also needs a single regulator to oversee the biggest financial firms, Geithner told the House Financial Services Committee in prepared testimony.

http://money.cnn.com/2009/03/26/news/ge ... /index.htm