Word: bailouts
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...York City in 1989. "We are here because Rudy Giuliani decided to make it his project to gain votes . . . by going after Drexel," argued one ex-staffer. Treasury Secretary Nicholas Brady, who used to head the investment house Dillon Read, was accused of a "vendetta" in not ordering a bailout for Drexel. Said a former employee: "Drexel took a lot of business from them ((Dillon Read...
...least two Democrats are already calling for an overhaul of the bailout. Minnesota Congressman Bruce Vento and Nebraska Senator Bob Kerrey proposed bills last month that would scrap the Oversight Board and concentrate all responsibility for the rescue effort within one agency. Says Kerrey: "This is the No. 1 domestic problem, and it isn't being given the attention it deserves. Bush has dropped the ball." Even so, Congress and the Administration are likely to avoid returning to the S&L problem this year. Almost no one wants to admit defeat on a much applauded plan so soon after enacting...
...agency that polices the banking industry. But a separate panel called the RTC Oversight Board, which is chaired by Treasury Secretary Nicholas Brady, decides RTC policy and controls its funding. Congress agreed to give the Treasury a role so that the Administration would have a major stake in the bailout, but dividing responsibility has prompted feuding between the Treasury and the FDIC. "It is a perfect setup for blaming someone else," complains Seidman...
Real estate experts argue that the bailout law is fraught with overcautious rules, largely designed to prevent the appearance of a gigantic giveaway to developers and financiers, that have slowed the process unnecessarily. To avoid setting fire-sale prices in shaky markets, the Government is bound to sell assets at no less than 95% of their appraised value. That restriction has scotched many deals, since buyers can often find better prices elsewhere. Another drawback is the agency's refusal to fix up old properties or provide loans for potential buyers. With enough troubles of their own, many banks and thrifts...
...bailout's credibility is also being hurt by the Government's problems in finding and keeping top talent to lead the rescue, which many potential candidates view as a thankless job. Daniel Kearney, a real estate expert with Wall Street and Washington experience, seemed an ideal choice for chief executive of the Oversight Board. But Kearney quit in February after just four months on the job, citing a lack of authority "essential to be effective in this process." At the same time, the Treasury Department is having trouble replacing M. Danny Wall, the head of the Office of Thrift Supervision...