WASHINGTON (AP) - Treasury Secretary Timothy Geithner and other
top officials are putting the finishing touches on a plan to overhaul the government's $700 billion financial rescue program.
A Treasury official said Geithner will deliver a speech on Monday outlining the new plan.
But Treasury officials would not comment on a report Thursday that the administration is considering proposing changes to the current accounting standard that require banks to carry assets such as mortgage-backed securities on their books at fair value, a process known as "mark to market."
Critics of this process contend that it has made the current financial crisis worse by forcing banks to slash the value of assets that are currently depressed because of market conditions. Treasury officials said the administration's plan was not yet complete and would be revealed in Geithner's speech in Washington next week.
Geithner met Thursday with Federal Reserve Chairman Ben Bernanke
and other officials who serve on the President's Working Group on
Financial Markets. The group was formed in the wake of the 1987 stock market crash with the goal of better coordinating the government's response to market crises.
"This is a critically important group," Geithner told reporters before the meeting began. "Together this group has the authorities and instruments and experience and talent that are going to be critical to helping solve the financial problems facing our country."
Besides Geithner and Bernanke, the working group includes Mary
Schapiro, the new head of the Securities and Exchange Commission,
and Michael Dunn, the acting chairman of the Commodity Futures
Also meeting with the group were Lawrence Summers, who heads
President Barack Obama's National Economic Council, and Christina
Romer, the head of the president's Council of Economic Advisers.
The discussions also included top banking regulators Sheila Bair, head of the Federal Deposit Insurance Corp., Comptroller of the Currency John Dugan, and James B. Lockhart, director of the Federal Housing Finance Agency, which oversees mortgage giants Fannie Mae and Freddie Mac.
The administration's overhaul of the controversial $700 billion bailout plan is expected to provide support to banks to deal with some of the toxic assets that are now weighing down their balance sheets and keeping them from resuming more normal lending.
(Copyright 2009 by The Associated Press. All Rights Reserved.)