Officials from the administration of US President Barack Obama have determined they can avoid asking Congress for more bank bailout funds by converting existing loans to the largest US banks into common stock, the New York Times reported on Sunday.
Obama’s top economic advisers now say such a conversion would let them stretch what is left of the US$700 billion financial bailout fund further than they had expected a few months ago, the paper said, citing administration officials it did not identify.
Converting the loans to the 19 biggest US banks into common shares would turn the government aid into available capital and give the government a large equity stake in return, the newspaper said.
Some critics would consider the option a back door to nationalization since the government could become the largest shareholder in several banks, the report said.
The US Treasury Department estimates it has about US$134.5 billion remaining in the US$700 billion financial rescue fund approved by Congress in October.
The change to common stock would not require the government to contribute any additional cash, but it could increase the capital of big banks by more than US$100 billion, the newspaper said.
Asked about the report, a Treasury Department official pointed to an agency paper on the aid program without elaboration.
A section of the so-called White Paper reads: “The capital provided to eligible banking organizations under this program will be in the form of a preferred security that is convertible into common equity.”
White House Chief of Staff Rahm Emanuel said on ABC’s This Week with George Stephanopoulos on Sunday that the administration thought it could avoid nationalizing US banks.
A major challenge for the US economy is to restore confidence that its banks are now sufficiently capitalized after huge losses from the collapse of the housing market.
Obama’s economic team is conducting stress tests of the top 19 US firms and will issue guidelines on the process on Friday, with results due on May 4.
“We believe we have those resources available in the government as the final backstop to make sure that the 19 are financially viable and effective,” Emanuel said. “If they need capital, we have that capacity.”
People can preregister to receive their NT$10,000 (US$325) cash distributed from the central government on Nov. 5 after President William Lai (賴清德) yesterday signed the Special Budget for Strengthening Economic, Social and National Security Resilience, the Executive Yuan told a news conference last night. The special budget, passed by the Legislative Yuan on Friday last week with a cash handout budget of NT$236 billion, was officially submitted to the Executive Yuan and the Presidential Office yesterday afternoon. People can register through the official Web site at https://10000.gov.tw to have the funds deposited into their bank accounts, withdraw the funds at automated teller
PEACE AND STABILITY: Maintaining the cross-strait ‘status quo’ has long been the government’s position, the Ministry of Foreign Affairs said Taiwan is committed to maintaining the cross-strait “status quo” and seeks no escalation of tensions, the Ministry of Foreign Affairs (MOFA) said yesterday, rebutting a Time magazine opinion piece that described President William Lai (賴清德) as a “reckless leader.” The article, titled “The US Must Beware of Taiwan’s Reckless Leader,” was written by Lyle Goldstein, director of the Asia Program at the Washington-based Defense Priorities think tank. Goldstein wrote that Taiwan is “the world’s most dangerous flashpoint” amid ongoing conflicts in the Middle East and Russia’s invasion of Ukraine. He said that the situation in the Taiwan Strait has become less stable
CONCESSION: A Shin Kong official said that the firm was ‘willing to contribute’ to the nation, as the move would enable Nvidia Crop to build its headquarters in Taiwan Shin Kong Life Insurance Co (新光人壽) yesterday said it would relinquish land-use rights, or known as surface rights, for two plots in Taipei’s Beitou District (北投), paving the way for Nvidia Corp to expand its office footprint in Taiwan. The insurer said it made the decision “in the interest of the nation’s greater good” and would not seek compensation from taxpayers for potential future losses, calling the move a gesture to resolve a months-long impasse among the insurer, the Taipei City Government and the US chip giant. “The decision was made on the condition that the Taipei City Government reimburses the related
FRESH LOOK: A committee would gather expert and public input on the themes and visual motifs that would appear on the notes, the central bank governor said The central bank has launched a comprehensive redesign of New Taiwan dollar banknotes to enhance anti-counterfeiting measures, improve accessibility and align the bills with global sustainability standards, Governor Yang Chin-long (楊金龍) told a meeting of the legislature’s Finance Committee yesterday. The overhaul would affect all five denominations — NT$100, NT$200, NT$500, NT$1,000 and NT$2,000 notes — but not coins, Yang said. It would be the first major update to the banknotes in 24 years, as the current series, introduced in 2001, has remained in circulation amid rapid advances in printing technology and security standards. “Updating the notes is essential to safeguard the integrity
RSS