Treasury Secretary Hank Paulson briefed Congressional leaders on plans to address the "illiquid assets" on U.S. financial institutions' balance sheets, possibly including the creation of a government facility to take on financial firms' bad debts.
Such a facility would be similar to the Resolution Trust Corporation, which was set up in 1989 to take on all the failed thrift assets during the savings and loan crisis, sources told CNBC.
"What we are working on now is an approach to deal with the systemic risk and stresses in our capital markets," Paulson said. "As we've said for some time, the root cause for the stress in the capital markets is the real estate correction and what's going on in terms of the price declines in real estate. We're coming together to work on an expeditious solution, which is aimed right at the heart of this problem, which is illiquid assets on financial institutions' balance sheets."
Source:CNBC
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Did this help the recovery in the markets? I will share a chart that will show the coincidence
FOMC Projections
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