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    Economic Rescue Principles

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    wmdtvmatt
    The document outlines a common sense plan to rescue the economy without relying on taxpayers. It proposes three key principles: [1] Using premiums paid by holders of mortgage-backed securities to insure the remaining outstanding securities rather than using taxpayer funds; [2] Drawing private capital into the markets by reducing regulatory and tax barriers instead of injecting taxpayer dollars; [3] Increasing transparency, oversight and reforms by requiring disclosure, limiting risky loans, auditing failed companies and credit agencies, and creating a panel to recommend financial sector reforms.

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    Economic Rescue Principles

    Uploaded by

    wmdtvmatt
    22 views2 pages
    The document outlines a common sense plan to rescue the economy without relying on taxpayers. It proposes three key principles: [1] Using premiums paid by holders of mortgage-backed securities to insure the remaining outstanding securities rather than using taxpayer funds; [2] Drawing private capital into the markets by reducing regulatory and tax barriers instead of injecting taxpayer dollars; [3] Increasing transparency, oversight and reforms by requiring disclosure, limiting risky loans, auditing failed companies and credit agencies, and creating a panel to recommend financial sector reforms.

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    The document outlines a common sense plan to rescue the economy without relying on taxpayers. It proposes three key principles: [1] Using premiums paid by holders of mortgage-backed securities to insure the remaining outstanding securities rather than using taxpayer funds; [2] Drawing private capital into the markets by reducing regulatory and tax barriers instead of injecting taxpayer dollars; [3] Increasing transparency, oversight and reforms by requiring disclosure, limiting risky loans, auditing failed companies and credit agencies, and creating a panel to recommend financial sector reforms.

    Copyright:

    Attribution Non-Commercial (BY-NC)
    Download as DOC, PDF, TXT or read online from Scribd
    Flag for inappropriate content
    Download as doc, pdf, or txt
    22 views2 pages

    Economic Rescue Principles

    Uploaded by

    wmdtvmatt
    The document outlines a common sense plan to rescue the economy without relying on taxpayers. It proposes three key principles: [1] Using premiums paid by holders of mortgage-backed securities to insure the remaining outstanding securities rather than using taxpayer funds; [2] Drawing private capital into the markets by reducing regulatory and tax barriers instead of injecting taxpayer dollars; [3] Increasing transparency, oversight and reforms by requiring disclosure, limiting risky loans, auditing failed companies and credit agencies, and creating a panel to recommend financial sector reforms.

    Copyright:

    Attribution Non-Commercial (BY-NC)
    Download as DOC, PDF, TXT or read online from Scribd
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    Economic Rescue Principles

    Common Sense Plan to Have Wall Street Fund the Recovery, Not Taxpayers

    • Rather than providing taxpayer funded purchases of frozen mortgage assets, we


    should adopt a mortgage insurance approach to solve the problem.

    • Currently the federal government insures approximately half of all mortgage


    backed securities. (MBS) We can insure the rest of current outstanding MBS;
    however, rather than taxpayers funding insurance, the holders of these assets
    should pay for it. Treasury Department can design a system to charge premiums
    to the holders of MBS to fully finance this insurance.

    Have Private Capital Injection to the Financial Markets, Not Tax Dollars

    • Instead of injecting taxpayer capital into the market to produce liquidity, private
    capital can be drawn into the market by removing regulatory and tax barriers that
    are currently blocking private capital formation. Too much private capital is
    sitting on the sidelines during this crisis.

    • Temporary tax relief provisions can help companies free up capital to maintain
    operations, create jobs, and lend to one another. In addition, we should allow for
    a temporary suspension of dividend payments by financial institutions and other
    regulatory measures to address the problems surrounding private capital liquidity.

    Immediate Transparency, Oversight, and Market Reform

    • Increase Transparency. Require participating firms to disclose to Treasury the


    value of their mortgage assets on their books, the value of any private bids within
    the last year for such assets, and their last audit report.

    • Limit Federal Exposure for High Risk Loans: Mandate that the GSEs no longer
    securitize any unsound mortgages.

    • Call on the SEC to audit reports of failed companies to ensure that the financial
    standing of these troubled companies was accurately portrayed.

    • Wall Street Executives should not benefit from taxpayer funding.

    • Call on the SEC to review the performance of the Credit Rating Agencies and
    their ability to accurately reflect the risks of these failed investment securities.

    • Create a blue ribbon panel with representatives of Treasury, SEC, and the Fed to
    make recommendations to Congress for reforms of the financial sector by January
    1, 2009.

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