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Government Mulls Facility to Buy Bad Debt
Stocks soared on the news Treasury Secretary Henry Paulson is considering the creation of an entity similar to the Resolution Trust Corp. of the late 1980s that solved the savings and loan crisis.
The federal government is mulling the creation of a facility to take on bad debt from reeling financial institutions as a way to stem the deepening financial crisis,
CNBC
reported Thursday.
Treasury Secretary Henry Paulson is floating the idea of a government entity, similar to the Resolution Trust Corp. of the late 1980s that solved the savings and loan crisis, to take over bad debts from a number of financial institutions.
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After the report aired, the overall stock market rocketed higher, and the financials were some of the biggest beneficiaries.
This article was written by a staff member of TheStreet.com.
