Radical Measures May Be In The Wings
POSTED BY:Albert Bozzo
TOPICS:Henry Paulson | Ben Bernanke | Federal Reserve | Banking
SECTORS:Financial Services | Banks
COMPANIES:Morgan Stanley | Goldman Sachs Group Inc
By Albert Bozzo Senior Features Editor | 10 Oct 2008 | 12:33 PM ET Text Size
As the financial crisis threatens to spiral out of control, Treasury Secretary Henry Paulson is prepared to take extraordinary steps through the extensive authority granted to him under emergency rescue legislation.
With the legislation’s main mechanism—an auction system to purchase bad mortgage-based securities—still weeks away from implementation, Paulson is now expediting plans to inject capital into banks, CNBC has learned.
According to senior government officials, the plan is to offer a term sheet, offering capital injections to all banks. An announcement won't happen for several days.
Even before details of the latest measures began to trickle out, there was heightened concern about the health of big institutions and the need for direct government support.
http://www.cnbc.com/id/27114651