Obama team weighs government bank to ease crisis
WASHINGTON (Reuters) - The incoming Obama administration is considering setting up a government-run bank to acquire bad assets clogging the financial system, a person familiar with the Obama team's thinking said on Saturday.
The U.S. Federal Reserve, Treasury and Federal Deposit Insurance Corp have been in talks about ways to ease a banking crisis that is once again deepening -- and a government-run "aggregator bank" is among the options.
Outgoing Treasury Secretary Henry Paulson and FDIC Chairman Sheila Bair both said on Friday a government bank was one of a number of ideas U.S. regulators had been discussing.
The source said advisers to President-elect Barack Obama, who takes office on Tuesday, were also considering the idea of an aggregator bank among a range of options that could be pursued.
David Axelrod, a top adviser to Obama, told Reuters the new administration would have something to say about a fresh approach to the financial crisis in "the next few days."
"I'm not going to get into the structure of how we're going to approach the revamped financial rescue package," Axelrod said after speaking to a conference of mayors in Washington.
"What we have to do is approach this with a lot more transparency on the front end."
In addition to steps to bolster banks, Obama officials want to aggressively attack the underlying causes of the credit crisis: the sharp downturn in the U.S. housing market and the related deterioration in mortgage-related assets.
"There are a range of things we're going to have to do to stabilize the financial community and part of it is going to involve housing, and part of it is going to involve how we approach this issue generally," Axelrod said.
If you know anything about the horrible efficiency with which the Government operates, you know that nationalized banking is a horrible idea. Thomas Jefferson knew this about centralized banking like a million years ago. Why don't people know this now.
"The central bank is an institution of the most deadly hostility existing against the Principles and form of our Constitution. I am an Enemy to all banks discounting bills or notes for anything but Coin. If the American People allow private banks to control the issuance of their currency, first by inflation and then by deflation, the banks and corporations that will grow up around them will deprive the People of all their Property until their Children will wake up homeless on the continent their Fathers conquered" (Jefferson).
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