In testimony before a congressional subcommittee today, Interim Assistant Secretary of the Treasury for Financial Stability Neel Kashkari provided important details on the Treasury Department's future strategy for deploying funds under the Troubled Asset Relief Program (TARP).
In his testimony, Assistant Secretary Kashkari stated that: "... in order to continue their critical role as providers of credit, both banks and non-banks may need more capital, given their troubled asset holdings, continued high rates of foreclosures, and stagnant global economic conditions. To do this, we are designing further strategies for building capital in financial institutions and are evaluating programs which would further leverage the impact of a TARP investment by attracting private capital, potentially through matching investments." Kashkari testified that the Treasury would soon post the terms pursuant to which private banks could participate in the Capital Purchase Program.

Kashkari also testified that the Treasury is "examining strategies to support consumer access to credit outside the banking system, specifically, the asset-backed securitization market." Kashkari stated that the asset-backed securitization market "is currently in distress and its illiquidity is raising the cost and reducing the availability of car loans, student loans, and credit cards."

Click here to go to Kashkari's testimony.

For further information on the Emergency Economic Stabilization Act, please contact:

Dominic De Simone, Co-Chair, Distressed Real Estate Initiative
Joseph A. Fanone, Public Finance Department
Justin P. Klein, Business and Finance Department
Thomas Hauser, Business and Finance Department
Alan Kaplinsky, Consumer Financial Services
Vincent Marriott III, Bankruptcy, Reorganization and Capital Recovery Group
Brian Pinheiro, Employee Benefits and Executive Compensation Group

Prior Alerts

November 12, 2008
Treasury Secretary Details TARP Strategy 

November 7, 2008
Treasury Department Announces Solicitation Regarding Asset Management Services in Connection with EESA Capital Purchase Program 

November 6, 2008

Beware: Is There a "Trojan Horse" in the Capital Purchase Program Securities Purchase Agreement?

October 23, 2008
Kashkari Testifies Before Senate Banking Committee 

October 14, 2008
Treasury, Federal Reserve, and FDIC Joint Statement Capital Purchase Program

October 13, 2008
Remarks on TARP to Institute of International Bankers

October 7, 2008
Emergency Economic Stabilization Act of 2008/TARP

October 6, 2008
Employee Benefits and Executive Compensation Issues Connected to Emergency Economic Stabilization Act of 2008 

October 6, 2008
Emergency Economic Stabilization Act of 2008

Copyright © 2008 by Ballard Spahr LLP.
(No claim to original U.S. government material.)

All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted in any form or by any means, electronic, mechanical, photocopying, recording, or otherwise, without prior written permission of the author and publisher.

This newsletter is a periodic publication of Ballard Spahr LLP and is intended to alert the recipients to new developments in the law. It should not be construed as legal advice or legal opinion on any specific facts or circumstances. The contents are intended for general informational purposes only, and you are urged to consult your own lawyer concerning your situation and specific legal questions you have.