Posted on 11/01/2010 7:13:01 AM PDT by WashingtonSource
The special inspector general for TARP discusses how and why the program has failed to meet some of its stated goals.
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Q: There have been statements since your audit report on the decision to pay 100 percent for the toxic assets in Maiden Lane III to AIG’s counterparties that said that the government and Federal Reserve Bank officials did not have the authority to require less than 100 percent payment. Yet, as you point out, the same officials did not have the authority to compel banks to accept the capital injections, yet they pressured them to do so.
A: The reason I think that is a nonsensical defense is that the regulators did not force any of the banks to take any of the capital. They were prepared to, but they didn’t because they took them in a room and they said to them [that] this is really important and we really want [you] to do this. They were fully prepared to tell them they had to take the capital. They didn’t have to. They summoned them down to Washington on very short notice. They put them all in a conference room. And they said, “This is really what we think you should do.”
(Excerpt) Read more at robertstoweengland.com ...
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