At a time when most government officials in the executive branch and at the Federal Reserve continue to support the “bail out” approach, Thomas M. Hoenig, President of the Kansas City Federal Reserve bank and a voting member of the Federal Open Market Committee, has put forward an alternative prescription to deal with the troubled financial system. The text of Mr. Hoenig’s recent testimony before the Joint Economic Committee of the United States Congress requires close attention. Read this article for more details.
While the strong first quarter results posted by Goldman Sachs on Monday seemed to surprise most observers, it really comes as no surprise that the firm is now seeking to free itself from the shackles of the TARP financing that it was essentially forced to accept in October 2008. The $5 billion common stock offering announced today will allow Goldman Sachs to retire part of the TARP funding, subject to government approval.
The Congressional Oversight Panel released a new report assessing the overall effectiveness of the Troubled Asset Relief Program (TARP) which was introduced six months ago. The executive summary is worth a quick review particularly given that TARP is very much in the news these days with the Wall Street Journal and others reporting an expansion of the program to life insurers that were previously not eligible for assistance. Read this post for details.