Discussions between the Obama administration and financial industry representatives continued for a third day Sunday with the focus moving to new terms on lending, transparency and executive compensation for companies receiving financial aid, according to a source familiar with the situation.
CNBC.com reported Saturday that the talks were centered around the Obama administration's consideration of a group of options in providing aid to the financial sector, which include a bad bank concept to buy toxic assets.
The announcement of new terms is expected to come this week, the source said, while the announcement of the financial aid plan now appears to be pushed back to the following week. Specifics on the possible terms are still unclear at this point. "Things are fluid," said the source.
Saturday's talks appeared to unfold on a dual track.
The aid portion also included consideration of capital injections along the lines of the recapitalization measures undertaken by the Bush administration, and a so-called "ring fence" concept, in which the government uses a combination of guarantees and insurance to cover bad assets within an institution without technically removing them from the balance sheet.
One or all of the options could be applied as part of a sweeping plan to ease the credit crisis that also appears to include a number of measures to help homeowners and consumers.
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