The Securities Industry and Financial Markets Association’s (SIFMA) president and CEO, Tim Ryan, released the following statement after Treasury, the Federal Reserve and the Federal Deposit Insurance Corporation this morning announced it would spend up to the entire first tranche of $250 billion on bank recapitalization:
"The federal government today provided greater detail on the first steps it would take under the Emergency Economic Stabilization Act, focusing on recapitalization. Bank recapitalization is a necessary component of any larger stabilization plan which will help restore investor confidence, and we are heartened to see Treasury moving forward with speed and efficiency in this important area.
“This is one of the vital fronts of a multi-pronged strategy, but it is only one. Our credit markets are the very engine of America’s economic growth, and any larger program which aims to re-start this economy must also provide these markets liquidity and price discovery for the frozen assets which remain on balance sheets. Until we have an idea what these assets are worth, loans will remain hard to come by, whether they are between businesses or for average Americans. We continue to work with Treasury and we look forward to additional announcements which will address these issues, likely through an auction process.
“We are confident that today Treasury and its counterparts have the tools at their disposal to solve these difficult problems, and we look forward to seeing their continued efforts on multiple fronts.”
