“Friendship Ends When It Comes To Money”
Tuesday, September 23rd, 2008The big news today is the Bush administration’s proposed $750 billion+ plan to address current turmoil in the US financial markets by giving the Treasury Department authority to purchase bank assets. Even as this is being written, hearings are taking place before the US Senate’s Banking Committee featuring the two main agents of the American government’s rescue plan, namely Treasury Secretary Henry Paulson and Federal Reserve Chairman Ben S. Bernanke.
As befits this blog’s name, though, we like to take a Euro or at least international perspective on things whenever we can, and there are certainly such angles to this story. In fact, the two I can detect are attractively symmetrical. On the one hand, Treasury Secretary Paulson announced that foreign-owned banks active in the US capital markets will also be eligible to exchange faltering financial assets for American cash via the proposed “bail-out” facility. On the other, administration officials are starting to look to foreign treasuries to contribute funds towards this bail-out.
As the New York Times reports today, that effort does not seem to be doing well in its early going. (more…)
