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The Treasury Department plans to name its prime contractor for the federal bailout job Tuesday, officials said Monday.
“Congress passed the new law just 10 days ago, but in that time, we have accomplished a great deal on many fronts,” said Neel Kashkari, interim assistant secretary for Financial Stability in comments before the Institute of International Bankers.
Oct. 6, the Treasury Department put out solicitations for asset management firms to help implement the Troubled Asset Relief Program (TARP), through which the government will buy troubled mortgage debt from financial institutions.
After a weekend in which European leaders promised to make billions of euros available in a bid to revive bank-to-bank lending, investors are sure to shift their attention back to the U.S. Bush Administration officials have already made clear that their emphasis has shifted from liquidity—buying up problem assets—to shoring up capital at banks and other financial institutions. The U.S. Treasury has made clear it plans to provide capital by taking stakes in financial companies.
But the market wants details: when, how, and which institutions, to start. "The experiences of the past several weeks have conditioned the market to be skeptical of vague or ambiguous solutions," Morgan Stanley analyst Ned Rumpeltin said after the Group of Seven industrialized nations issued a broadly worded "plan of action" on Friday.