Dodd's proposal seeks to strip the Federal Reserve of its supervisory power over banks, create a consumer protection agency, restrict the Fed's ability to issue emergency funds to financial companies, and set up an agency specifically to unwind institutions when necessary, among other things. Geithner seems to be on the same page.
"The proposed resolution authority would not authorize the government to provide open-bank assistance to any failing firm," he stated. In other words, the authority would facilitate the orderly demise of a failing firm, not ensure its survival."
Geithner's appearance on Capitol Hill began earlier this morning and is ongoing. He was quoted by Dow Jones as saying he "wants to put TARP [the Troubled Asset Relief Program] out of its misery."
Companies that still owe the government TARP funds include American International Group (AIG), Bank of America (BAC), and Citigroup (C). Goldman Sachs (GS) and JPMorgan Chase (JPM) are among those companies that have already paid back TARP funds.Written by Michael Baron in New York.
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