U.S. Seeks Expanded Power to Seize Firms
Goal Is to Limit Risk to Broader Economy
By Binyamin Appelbaum and David Cho
Washington Post Staff Writers
Tuesday, March 24, 2009; Page A01

The Obama administration is considering asking Congress to give the Treasury secretary unprecedented powers to initiate the seizure of non-bank financial companies, such as large insurers, investment firms and hedge funds, whose collapse would damage the broader economy, according to an administration document.

The government at present has the authority to seize only banks.

Giving the Treasury secretary authority over a broader range of companies would mark a significant shift from the existing model of financial regulation, which relies on independent agencies that are shielded from the political process. The Treasury secretary, a member of the president's Cabinet, would exercise the new powers in consultation with the White House, the Federal Reserve and other regulators, according to the document.

The administration plans to send legislation to Capitol Hill this week. Sources cautioned that the details, including the Treasury's role, are still in flux.

Treasury Secretary Timothy F. Geithner is set to argue for the new powers at a hearing today on Capitol Hill about the furor over bonuses paid to executives at American International Group, which the government has propped up with about $180 billion in federal aid. Administration officials have said that the proposed authority would have allowed them to seize AIG last fall and wind down its operations at less cost to taxpayers.
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The administration's proposal contains two pieces. First, it would empower a government agency to take on the new role of systemic risk regulator with broad oversight of any and all financial firms whose failure could disrupt the broader economy. The Federal Reserve is widely considered to be the leading candidate for this assignment. But some critics warn that this could conflict with the Fed's other responsibilities, particularly its control over monetary policy.

The government also would assume the authority to seize such firms if they totter toward failure.

Besides seizing a company outright, the document states, the Treasury Secretary could use a range of tools to prevent its collapse, such as guaranteeing losses, buying assets or taking a partial ownership stake. Such authority also would allow the government to break contracts, such as the agreements to pay $165 million in bonuses to employees of AIG's most troubled unit.

The Treasury secretary could act only after consulting with the president and getting a recommendation from two-thirds of the Federal Reserve Board, according to the plan.

Geithner plans to lay out the administration's broader strategy for overhauling financial regulation at another hearing on Thursday.

The authority to seize non-bank financial firms has emerged as a priority for the administration after the failure of investment house Lehman Brothers, which was not a traditional bank, and the troubled rescue of AIG.

"We're very late in doing this, but we've got to move quickly to try and do this because, again, it's a necessary thing for any government to have a broader range of tools for dealing with these kinds of things, so you can protect the economy from the kind of risks posed by institutions that get to the point where they're systemic," Geithner said last night at a forum held by the Wall Street Journal.

The powers would parallel the government's existing authority over banks, which are exercised by banking regulatory agencies in conjunction with the Federal Deposit Insurance Corp. Geithner has cited that structure as the model for the government's plans

There goes all our retirement accounts.

It may be time to cash out for a penalty and invest in land...

Could they seize Paypal?

Somehow, I just think they'd get worse...they're already anti-gun as it is

Yeah, jump out of the pot and into the fire..

Sounds as if they have a lot of faith in their new solution.
















 

Paypal makes their money off fees & skimming...

They aren't really a 'bank' - more like a clearinghouse....

They'll seize that too.  They will ED it for the "greater good."




 

No worries. All we have to do is write our representatives, tell them we do not want to socialize our country and they will stop. I swear.

They hold your money, are not legally bound to let you have it, a commie bank is safer.

They don't need regulation or over site if their practice were outlawed, which would be fine by me.

Awesome.  I hope my company is a victim of nationalization.  Then, when I get the bonus that was a term of my employment, the public can get angry.  The Democrats will threaten to release my name to the public if I don't voluntarily give back my paycheck.  The masses will threaten to kill me in the street.  The House of Representatives will try to pass a 90% retroactive tax specifically targeting the employees of the company for which I work.
That would be awesome.  

Love the lord, thy God, Obama.....  or else.

The only problem with that is property taxes.  All the gov't has to do is decide you owe FEDERAL taxes on property and now the land turns into more of a liability rather than an asset.  One way or another they will fuck us.

WTF! The government has mechanisms to deal with failing institutions, its called BANKRUPTCY!  Others will take their place, holy crap, life isn't supposed to be peaches and cream, but there are always others willing to try and make money...or there used to be!

If that doesn't work, we can just vote them out! The second that happens, all the bad shit they did will vanish with them. Honest.



 

Maybe if the gov't would have kept their fucking hands out of the banking industry in the first place this wouldn't have happened!

The GSEs Fannie & Freddie opened the flood gates to piss poor lending practices AT THE GOV'TS BEHEST.

They're now trying to impose the same shit on credit unions and smaller banks that have stayed liquid by following sound business/lending practices.

FUCK OBAMA & GEITHNER

We all need to find a way to earn a second income as cash only, and turn that cash into gold.  The more the .gov controls the banking industry, the more they will know about each and every one of us.

Cash is king and cash is gold.

I still seethe about the SCOTUS Kelo vs. New London decision.  "Constitutional" thievery if you ask me.  Now we have to find another case to bring up with a different aspect to get by this dangerous precedent to get this abomination overturned.  Damn you, Souter.

american chavez.

And what happens when the government seizes all gold?

They did it before.

As long as the government has the power to seize things like this, there is absolutely no fucking way you're gonna somehow outsmart them, except by having this stuff repealed or declared unConstitutional.

where does one buy real gold?