Daily Archives: February 10, 2009

Is Tarp II enough?

February 10, 2009 8:53 pm by Financial Times

By Michael Pomerleano, Harald Scheule, and Andrew Sheng

The US Treasury just announced a Financial Stability Plan (revamped Tarp) to help purge banks of their bad bets by partnering with the private sector to buy troubled assets. The basic idea is to lend government money (US Federal Reserve) or guarantee borrowings (Federal Deposit Insurance Corporation) at a suitable spread over Libor to anyone- e.g., hedge funds and pension funds – who wants to buy toxic assets from the banks.  Read more

Posted in Banks, Credit squeeze, Federal Reserve, TARP |

China’s exchange rate policy is the quid pro quo for fiscal expansion

February 10, 2009 10:47 am by Financial Times

By Ronald McKinnon

Tensions between the US and China escalated recently when Timothy Geithner, the new US Treasury secretary, suggested that China might be designated as a “currency manipulator’. Premier Wen Jiabao mounted a vigorous defence of China’s existing exchange rate policy at a high level meeting of world leaders at Davos, Switzerland. Mr Wen pledged to keep the renminbi at a “reasonable and balanced level”. Read more

Posted in China, Currencies, Fiscal policy |