Discussed
Obama asks Treasury for guidelines on bailout
U.S. President Barack Obama (R) meets with Treasury Secretary Timothy Geithner in the Oval Office at the White House in Washington, January 29, 2009.
Credit: Reuters/Jim Young
WASHINGTON |
WASHINGTON (Reuters) - President Barack Obama, who recently scolded Wall Street for taking large bonuses while seeking financial relief from the government, said he has asked Treasury Secretary Timothy Geithner to formulate guidelines for financial firms.
Obama, in an interview with NBC, said he had asked Geithner to "put together a clear set of guidelines. If a bank or a financial institution is getting relief, then they've got to abide by certain conditions."
Pressed on whether his administration would create a government entity to take toxic assets off the balance sheets of banks, Obama replied: "I don't want to preempt an announcement next week."
In the interview, conducted on Sunday but parts of which aired on Monday, Obama said the basic principle that some of the bad debt will have to be written down and government will have to support some banks and do something with those assets will be "part of an overall plan that not only strengthens credit markets, but, more importantly, puts people back to work."
Some Democrats have said setting up a bank to take on bad assets could cost as much as $4 trillion, but Obama rejected that assertion. "We're not going to be spending $4 trillion worth of taxpayer money."
He added that it was likely that banks have not fully acknowledged all the losses that they will experience and will have to write those down.
"And some banks won't make it," Obama said. "But we're going to have to wring out some of these bad assets."
(Reporting by Tabassum Zakaria)
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