The US government stands ready to force out banking bosses and install new management if their companies have to return for more bailout money, US Treasury Secretary Timothy Geithner said on Sunday.
Interviewed on CBS program Face the Nation, Geithner said there were “encouraging signs” for the recession-hit US economy but said “we need to keep acting as forcefully as we can” to get banks lending again.
And he denied the government was trying to evade congressional restrictions on executive compensation, after the Washington Post reported officials were worried that banks could be deterred from coming forward for federal help.
After the US government ousted General Motors chief executive Rick Wagoner and demanded deeper restructuring from the embattled carmaker, Geithner was asked if he would take a similar approach to needy bankers.
“If in the future banks need exceptional assistance in order to get through this, then we’ll make sure that assistance comes with conditions not just to protect the taxpayer but to make sure that it’s the kind of restructuring for them to emerge stronger,” he said.
“And where that requires a change of the management of the board, we’ll do that,” Geithner said.
He also addressed criticism that banks might shun a new public-private investment fund designed to clear out toxic assets, if the assets cannot command a healthy price.
“We’ll do what is necessary to make sure that our banking system emerges stronger,” he said, while side-stepping a question about whether the US administration might force banks to sell their distressed assets.
“Banks have a large incentive now to clean up their balance sheets,” he added after the government instituted new accounting rules in a bid to entice buyers and sellers into the market.
For the economy at large, the Treasury chief noted glimmers of hope as mortgage interest rates reach record lows.
“And millions of Americans now are going to be able to refinance their homes, take advantage of lower interest rates. That’s cash in the hands of the American people, and that’s very powerful,” Geithner said.
Despite a storm over bonuses paid out by bailed-out insurer AIG, the Post reported meanwhile that Geithner’s Treasury team was setting up intermediary companies to act as a buffer between the government and recipients of federal cash as a way of evading new legal restrictions on executive pay.
“Administration officials have concluded that this approach is vital for persuading firms to participate in programs funded by the US$700 billion financial rescue package,” the newspaper said.
Geithner responded: “No, that’s not true. Now, our obligation is to apply the laws that Congress just passed on executive comp, and we’re going to do that.”
AIR DEFENSE: The Norwegian missile system has proved highly effective in Ukraine in its war against Russia, and the US has recommended it for Taiwan, an expert said The Norwegian Advanced Surface-to-Air Missile Systems (NASAMS) Taiwan ordered from the US would be installed in strategically important positions in Taipei and New Taipei City to guard the region, the Ministry of National Defense said in statement yesterday. The air defense system would be deployed in Taipei’s Songshan District (松山) and New Taipei City’s Tamsui District (淡水), the ministry said, adding that the systems could be delivered as soon as the end of this year. The US Defense Security Cooperation Agency has previously said that three NASAMS would be sold to Taiwan. The weapons are part of the 17th US arms sale to
INSURRECTION: The NSB said it found evidence the CCP was seeking snipers in Taiwan to target members of the military and foreign organizations in the event of an invasion The number of Chinese spies prosecuted in Taiwan has grown threefold over a four-year period, the National Security Bureau (NSB) said in a report released yesterday. In 2021 and 2022, 16 and 10 spies were prosecuted respectively, but that number grew to 64 last year, it said, adding that the Chinese Communist Party (CCP) was working with gangs in Taiwan to develop a network of armed spies. Spies in Taiwan have on behalf of the CCP used a variety of channels and methods to infiltrate all sectors of the country, and recruited Taiwanese to cooperate in developing organizations and obtaining sensitive information
BREAKTHROUGH: The US is making chips on par in yield and quality with Taiwan, despite people saying that it could not happen, the official said Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) has begun producing advanced 4-nanometer (nm) chips for US customers in Arizona, US Secretary of Commerce Gina Raimondo said, a milestone in the semiconductor efforts of the administration of US President Joe Biden. In November last year, the commerce department finalized a US$6.6 billion grant to TSMC’s US unit for semiconductor production in Phoenix, Arizona. “For the first time ever in our country’s history, we are making leading edge 4-nanometer chips on American soil, American workers — on par in yield and quality with Taiwan,” Raimondo said, adding that production had begun in recent
Seven hundred and sixty-four foreigners were arrested last year for acting as money mules for criminals, with many entering Taiwan on a tourist visa for all-expenses-paid trips, the Criminal Investigation Bureau (CIB) said on Saturday. Although from Jan. 1 to Dec. 26 last year, 26,478 people were arrested for working as money mules, the bureau said it was particularly concerned about those entering the country as tourists or migrant workers who help criminals and scammers pick up or transfer illegally obtained money. In a report, officials divided the money mules into two groups, the first of which are foreigners, mainly from Malaysia
RSS