Geithner Wants Broad Authority To Seize U.S. Companies
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UPDATE: Hearings beginning right now (9am CT) on C-Span 1.
Treasury Secretary Timothy F. Geithner is set to argue for new powers to seize U.S. companies at a hearing today on Capitol Hill. The hearing is to address the bonuses paid to executives at American International Group, which the government has propped up with about $180 billion in federal aid. Administration officials say the proposed authority would have allowed them to seize AIG last fall and wind down its operations at less cost to taxpayers.
The government at present has the authority to seize only banks.
Press Secretary Robert Gibbs asserts:
“We need resolution authority to go in and be able to change contracts, be able to change the business model, unwind what doesn’t work. This is the exact type of authority that will allow us to deal with the problems in AIG . . . that will address the systemic risk without having to put [a failing firm] in bankruptcy.”
The Treasury secretary would exercise the new powers in consultation with the White House, the Federal Reserve and other regulators, according to an internal administration document obtained by the Washington Post.
The administration plans to send legislation to Capitol Hill this week. Welcome to the jungle.
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