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2009年2月12日 (木)

米新金融安定策 動き出す不良資産買い取り

The Yomiuri Shimbun (Feb. 12, 2009)

Will U.S. 'bad bank' achieve its purpose?

米新金融安定策 動き出す不良資産買い取り(212日付・読売社説)

Amid the expanding global financial crisis, the U.S. government overhauled its planned rescue measures and announced a new bailout package.


The U.S. Congress, for its part, should pass a stimulus bill into law immediately. Washington should use all the financial and monetary policy tools at its disposal to prevent the financial crisis from escalating.


The pillar of the new financial stabilization plan U.S. Treasury Secretary Timothy Geithner announced Tuesday is the establishment of a "bad bank" under a partnership between the government and private sector to help financial institutions value their mortgage securities by buying the toxic assets that are weighing down their balance sheets. The program could support up to 1 trillion dollars, or 90 trillion yen, in such bad-debt purchases.


By unyoking ailing financial institutions from their bad assets, the new bailout plan aims to encourage them to increase lending to companies and individuals, thus jump-starting the economy.


Under the plan, recapitalization of financial institutions with public funds will continue. The scale of a key U.S. Federal Reserve Board program lending to financial institutions, using securitized products and other financial instruments as collateral, will be expanded to 1 trillion dollars.



Real economy affected fast

The financial crisis has undermined the real economy faster than expected, rekindling financial instability. It is clear that measures taken by the administration of former U.S. President George W. Bush could not keep pace with the rapidly expanding crisis, and that the measures themselves were insufficient.


If nothing is done, the damage incurred by financial institutions will snowball, aggravating the global recession.


It was natural for the administration of U.S. President Barack Obama, which has grown increasingly concerned over the implications of the financial crisis, to review its initially planned measures.


The focus of attention now shifts to whether the envisaged bad bank will achieve its purpose. A solid institutional blueprint for its operation is needed.


The U.S. government had considered establishing the body to purchase financial institutions' troubled assets using only public funds, but it later sought the cooperation of the private sector in the program.


The 350 billion dollars of bailout cash allocated for rescuing ailing financial institutions that was part of a 700 billion dollars financial rescue plan using public funds unveiled in autumn will be insufficient to purchase the institutions' bad assets. The use of private sector money to establish the bad bank is, therefore, a last-ditch measure to lessen the financial burden on the U.S. government.


But will it be possible to collect a huge sum of private sector money to buy up banks' bad debt? Also, it will be no easy task to appraise the purchasing price for such distressed securities.



More funds may be needed

It will cost more than 1 trillion dollars to purchase banks' bad assets. According to one estimate, U.S. financial institutions could be saddled with as much as 4 trillion dollars worth of toxic debt. The Obama administration inevitably will have to consider increasing the amount of public funds set aside for purchasing it.


Meanwhile, the U.S. Senate has finally passed an 838 billion dollars economic stimulus bill. The rescue package is bigger than the one that the House of Representatives earlier passed. The chambers should unify the bills immediately.


At a press conference Monday, Obama warned that the economic crisis would turn into a "catastrophe" without immediate action.


The key to ending the vicious circle that caused the financial crisis that started in the United States to trigger a global recession is an early revitalization of the U.S. economy. The speed with which recovery measures are implemented will now be put to the test.


(From The Yomiuri Shimbun, Feb. 12, 2009)

20092120134  読売新聞)


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