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bailout - Bailouts may work but at big cost EDITOR'S...
Bailouts may work but at big cost EDITOR'S NOTE: One in a series of stories assessing how last fall's financial meltdown and the Great Recession have changed our lives. By Tom Raum Associated Press Writer WASHINGTON (AP) — After a year of costly government government bailouts and public distaste distaste for more, the government's government's response to the next company deemed "too big to fail" could be — another bailout. President Barack Obama warned Wall Street this week not to take risks on the assumption taxpayers will be there to "break their fall" the next time those bets turn sour. But, in fact, not much has happened happened this year to suggest that the federal government won't keep serving as a rescuer of last resort for giant financial institutions. One solution would be new regulations that would prevent companies from getting into trouble and needing government government help. But a regulatory overhaul first proposed by the Obama administration in March is bogged down in Congress. [nyi —AP Photo In this Nov. 21, 2008 file photo, pedestrians walk past a Citibank branch on Park Ave. in New York.:I^hel^CS. Has been shelling out tax dollars at an unprecedented rate to rescue companies deemed "too big to fail." But it may find itself with a problem too tough to fix anytime soon. recently selected by Obama for a second four-year term as chairman of the Federal Reserve. Still, he says he had to "hold my nose" over them. Today, polls show strong public distaste for bailouts, and politicians from the White House to the Capitol are saying saying "no more." The administration establish new consumer protections protections against potential bank collapses and set up a special category for "systemically important banks." The focus is on heading off future meltdowns meltdowns that would necessitate bailouts in the first place. Obama went to Wall Street on Monday to try to revive en the impact of future crises. Treasury Secretary "Kmothy Geithner and several other finance ministers are pushing for new international rules for banks with global reach, including a requirement for larger, higher-quality capital reserves to serve as a cushion in future crises. But actually coming up with such rules is expected to be difficult. Leaders Leaders of the world's 20 top economies are expected discuss the issue at a meeting next week in Pittsburgh. In addition, the steps taken last fall by the Federal Reserve and the Treasury Department have helped to shore up bank balancq :§)^eets, reducing the likelihoodiof additional bailouts i in thie coming days. So-called "stress tests" on major banks helped restore confidence by showing greater financial health among most big banks than expected. Some banks also were required to raise more capital. Taken together, these steps "will stand the test of time as a very impressive response to an unprecedented crisis," says David Jones, chief economist at the consulting firm DM J Advisors

Clipped from
  1. Bedford Gazette,
  2. 17 Sep 2009, Thu,
  3. Page 8

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