Word: planned
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...Administration's long-awaited plan to save America's banks is being delayed again, government sources tell Time. Fears of an AIG-like backlash among potential private investors, and the difficulty of creating a model to price toxic assets on the banks' balance sheets, have both contributed to the delay, the sources...
...slip is embarrassing for Treasury officials who have been assuring the media and the markets that the plan was coming, first in mid-February, and as recently as March 14 when Treasury Secretary Tim Geithner told Bloomberg TV he would release details soon. A senior Treasury department official says the plan isn't slipping, but other government officials say it is and could be unveiled anywhere from next week to early April. (See TIME's top 25 people to blame for the financial crisis...
...plan is intended to relieve banks of their toxic assets - including such securities as subprime mortgage bonds - through purchases by a public-private investment fund, heavily backed by government money. But versions of the plan have faced challenges from the start. Last year, when he was head of the New York Federal Reserve, Geithner said the government might to try by itself to restart sales in these assets using a "reverse auction" where sellers bid down an asset's price to compete for buyers. (Read "Obama's Challenge: Containing the AIG Bonus Outrage...
...That plan went nowhere, and in mid-February Geithner announced that the government would design a partnership between private investors and the feds that would kick-start a trading market for the assets. But figuring out what mix of incentives and restraints should be written into the program has proved extremely tricky...
...hand, no one wants taxpayer money handed indiscriminately to Wall Street investors with no hope of return. On the other, if the program doesn't encourage buyers to participate not only will the program fail, the markets could suffer a mini-panic, just as they did when the plan was unveiled with no details in mid-February...