Thursday, January 29, 2009

Administration vows bailout overhaul

This is reassuring. Full story here.

WASHINGTON - The Obama administration is increasing transparency in the government's controversial $700 billion financial rescue program and said Wednesday that more reforms are in the works.

Treasury Secretary Timothy Geithner is promising an even bigger overhaul of the program and said such action will be announced relatively soon. . . .

The program has come under heavy attack for how it was operated during the Bush administration. Critics say the decisions were veiled in too much secrecy and the former administration did not impose enough restrictions to make sure banks used the billions of dollars they were receiving to increase lending. . . .

Tighter rules

In his first full day in office on Tuesday, Geithner said the new administration was tightening the rules governing how companies are selected to receive bailout support. The new rules are designed to crack down on lobbyist influence over the program and make sure political clout is not a factor in awarding rescue money.

The new rules on lobbying came in the wake of reports filed with the government showing some big banks stepped up their lobbying efforts late last year even after they received billions of dollars from the bailout program. . . .

Along with the new lobbying rules, the administration of President Barack Obama has pledged to better track lending patterns by financial institutions to ensure that they are using the government assistance to increase lending. The new administration also has sought to limit executive compensation at institutions receiving government support and prevent shareholders at those companies from benefiting at taxpayers' expense.

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