The Obama administration is considering asking Congress to give the Treasury secretary unprecedented powers to initiate the seizure of non-bank financial companies, such as large insurers, investment firms and hedge funds, whose collapse would damage the broader economy, according to an administration document.<\/p>\n
Giving the Treasury secretary authority over a broader range of companies would mark a significant shift from the existing model of financial regulation, which relies on independent agencies that are shielded from the political process. The Treasury secretary, a member of the president\u2019s Cabinet, would exercise the new powers in consultation with the White House, the Federal Reserve and other regulators, according to the document.<\/p>\n
\nThe administration plans to send legislation to Capitol Hill this week. Sources cautioned that the details, including the Treasury\u2019s role, are still in flux.\n
Treasury Secretary Timothy F. Geithner is set to argue for the new powers at a hearing today on Capitol Hill about the furor over bonuses paid to executives at American International Group, which the government has propped up with about $180 billion in federal aid. Administration officials have said that the proposed authority would have allowed them to seize AIG last fall and wind down its operations at less cost to taxpayers.<\/p>\n
The administration\u2019s proposal contains two pieces. First, it would empower a government agency to take on the new role of systemic risk regulator with broad oversight of any and all financial firms whose failure could disrupt the broader economy. The Federal Reserve is widely considered to be the leading candidate for this assignment. But some critics warn that this could conflict with the Fed\u2019s other responsibilities, particularly its control over monetary policy.<\/p>\n
The government also would assume the authority to seize such firms if they totter toward failure.<\/p>\n
Besides seizing a company outright, the document states, the Treasury Secretary could use a range of tools to prevent its collapse, such as guaranteeing losses, buying assets or taking a partial ownership stake. Such authority also would allow the government to break contracts, such as the agreements to pay $165 million in bonuses to employees of AIG\u2019s most troubled unit.<\/p>\n
The government will \u201cseize\u201d private companies? This is what Hugo Chavez does. What is the term for that? <\/p>\n<\/div>\n<\/blockquote><\/body><\/html>\n","protected":false},"excerpt":{"rendered":"
From The Washington Post: The Obama administration is considering asking Congress to give the Treasury secretary unprecedented powers to initiate the seizure of non-bank financial companies, such as large insurers, investment firms and hedge funds, whose collapse would damage the broader economy, according to an administration document. The government at present has the authority to […]<\/p>\n","protected":false},"author":1281,"featured_media":0,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[13],"tags":[],"class_list":["post-1804","post","type-post","status-publish","format-standard","hentry","category-economics"],"yoast_head":"\n
The Power to Seize Firms<\/title>\n<meta name=\"description\" content=\"From The Washington Post: The Obama administration is considering asking Congress to give the Treasury secretary unprecedented powers to initiate the\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.patheos.com\/blogs\/geneveith\/2009\/03\/the-power-to-seize-firms\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"The Power to Seize Firms\" \/>\n<meta property=\"og:description\" content=\"From The Washington Post: The Obama administration is considering asking Congress to give the Treasury secretary unprecedented powers to initiate the\" \/>\n<meta property=\"og:url\" content=\"https:\/\/www.patheos.com\/blogs\/geneveith\/2009\/03\/the-power-to-seize-firms\/\" \/>\n<meta property=\"og:site_name\" content=\"Cranach\" \/>\n<meta property=\"article:author\" content=\"https:\/\/www.facebook.com\/cranachblog\/\" \/>\n<meta property=\"article:published_time\" content=\"2009-03-24T09:40:01+00:00\" \/>\n<meta name=\"author\" content=\"Gene Veith\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"Gene Veith\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"2 minutes\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\/\/schema.org\",\"@graph\":[{\"@type\":\"WebPage\",\"@id\":\"https:\/\/www.patheos.com\/blogs\/geneveith\/2009\/03\/the-power-to-seize-firms\/\",\"url\":\"https:\/\/www.patheos.com\/blogs\/geneveith\/2009\/03\/the-power-to-seize-firms\/\",\"name\":\"The Power to Seize Firms\",\"isPartOf\":{\"@id\":\"https:\/\/www.patheos.com\/blogs\/geneveith\/#website\"},\"datePublished\":\"2009-03-24T09:40:01+00:00\",\"dateModified\":\"2009-03-24T09:40:01+00:00\",\"author\":{\"@id\":\"https:\/\/www.patheos.com\/blogs\/geneveith\/#\/schema\/person\/f9ca8670bcc51908a78994c0484dbfa1\"},\"description\":\"From The Washington Post: The Obama administration is considering asking Congress to give the Treasury secretary unprecedented powers to initiate the\",\"breadcrumb\":{\"@id\":\"https:\/\/www.patheos.com\/blogs\/geneveith\/2009\/03\/the-power-to-seize-firms\/#breadcrumb\"},\"inLanguage\":\"en-US\",\"potentialAction\":[{\"@type\":\"ReadAction\",\"target\":[\"https:\/\/www.patheos.com\/blogs\/geneveith\/2009\/03\/the-power-to-seize-firms\/\"]}]},{\"@type\":\"BreadcrumbList\",\"@id\":\"https:\/\/www.patheos.com\/blogs\/geneveith\/2009\/03\/the-power-to-seize-firms\/#breadcrumb\",\"itemListElement\":[{\"@type\":\"ListItem\",\"position\":1,\"name\":\"Home\",\"item\":\"https:\/\/www.patheos.com\/blogs\/geneveith\/\"},{\"@type\":\"ListItem\",\"position\":2,\"name\":\"The Power to Seize Firms\"}]},{\"@type\":\"WebSite\",\"@id\":\"https:\/\/www.patheos.com\/blogs\/geneveith\/#website\",\"url\":\"https:\/\/www.patheos.com\/blogs\/geneveith\/\",\"name\":\"Cranach\",\"description\":\"\",\"potentialAction\":[{\"@type\":\"SearchAction\",\"target\":{\"@type\":\"EntryPoint\",\"urlTemplate\":\"https:\/\/www.patheos.com\/blogs\/geneveith\/?s={search_term_string}\"},\"query-input\":\"required name=search_term_string\"}],\"inLanguage\":\"en-US\"},{\"@type\":\"Person\",\"@id\":\"https:\/\/www.patheos.com\/blogs\/geneveith\/#\/schema\/person\/f9ca8670bcc51908a78994c0484dbfa1\",\"name\":\"Gene Veith\",\"image\":{\"@type\":\"ImageObject\",\"inLanguage\":\"en-US\",\"@id\":\"https:\/\/www.patheos.com\/blogs\/geneveith\/#\/schema\/person\/image\/\",\"url\":\"https:\/\/secure.gravatar.com\/avatar\/054d79faea5d476edd8f99e5f14fb17f?s=96&d=mm&r=g\",\"contentUrl\":\"https:\/\/secure.gravatar.com\/avatar\/054d79faea5d476edd8f99e5f14fb17f?s=96&d=mm&r=g\",\"caption\":\"Gene Veith\"},\"description\":\"Gene Edward Veith, Jr. is a writer and retired literature professor, serving as Provost Emeritus at Patrick Henry College. 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