is considering using more of its $700 billion rescue fund to buy stakes in a broad range of financial companies, not just banks and insurers, the
Wall Street Journal
Bond insurers and specialty finance firms such as
GE Capital unit and
would be the focus, the
reports, citing people familiar with the matter.
Treasury Secretary Henry Paulson in September unveiled a plan to buy up hard-to-sell assets of financial institutions such as mortgage-backed securities. But that proposal has yet to begin running, and the department may scrap part of that early plan -- purchasing assets through an auction process -- and instead purchase some of the distressed assets directly, the newspaper reports.
Of the original $700 billion, officials set aside $250 billion for equity investments. It has already invested $163 billion in a range of banks including
Bank of America
. That number will likely expand at the expense of the asset-purchase plan, but by exactly how much is unknown, according to the
"We are looking at many ideas for strengthening the financial system and for restoring lending," said Jennifer Zuccarelli, a Treasury spokeswoman, the
reports. "We are weighing ideas and have made no decisions."
This article was written by a staff member of TheStreet.com.