---------- Forwarded message ----------
From: guy perea <guyperea@gmail.com>
Date: Sat, 4 May 2013 23:40:55 +0800
Subject: CALIFORNIA PRISON PROBLEMS CONTINUE WITH "What is left
outstanding from '"The Bailout"' U.S. Department of the Treasury
Monthly Digest Bulletin"
To: guyperea1.columbia1@blogger.com, tammyperea16.vice1@blogger.com,
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---------- Forwarded message ----------
From: guy perea <guyperea@gmail.com>
Date: Sun, 31 Mar 2013 22:16:00 +0800
Subject: What is left outstanding from "The Bailout" U.S. Department
of the Treasury Monthly Digest Bulletin
To: guyperea1.usa1@blogger.com, julierobertsrc.pretty@blogger.com,
mixon245.pardon@blogger.com, tammyperea16.vice1@blogger.com,
guyperea1.columbia1@blogger.com
---------- Forwarded message ----------
From: guy perea <guyperea@rocketmail.com>
Date: Sun, 01 Feb 2009 16:49:22 +0000
Subject: FWD:U.S. Department of the Treasury Monthly Digest Bulletin
To: subscriptions@subscriptions.treas.gov, UNNews@un.org,
loc@service.govdelivery.com, slilly@scfl.lib.ca.us,
guyperea@gmail.com, gpoaccess@gpo.gov
*
----------President of the united states guy ralph perea sr
http://www.columbiabroadcast.spaces.live.com/ - or
http://guyperea.igloo.mobi/blog CM/ECF 464
------Original Message------
From: U.S. Department of the Treasury <subscriptions@subscriptions.treas.gov>
To: <guyperea@rocketmail.com>
Date: Sun, Feb 1, 2009 02:57 AM
Subject: U.S. Department of the Treasury Monthly Digest Bulletin
You have requested to receive a Monthly Digest e-mail from U.S.
Department of the Treasury.
Message: 1 From: U.S. Department of the Treasury
<subscriptions@subscriptions.treas.gov> Date: Fri, 2 Jan 2009 13:20:32
-0600 (CST) Subject: Treasury Releases Guidelines for Targeted
Investment Program
Treasury Releases Guidelines for Targeted Investment Program [
http://www.treas.gov/press/releases/hp1338.htm ]
January 2, 2009
HP-1338
*Treasury Releases Guidelines for Targeted Investment Program*
*
Washington - *Treasury today released the program description for the
Targeted Investment Program under which the Citigroup investment that
was announced on Nov. 23 was made. This program description is
required by Section 101(d) of the Emergency Economic Stabilization
Act. Other EESA program descriptions are posted at:
_http://www.treasury.gov/initiatives/eesa/program-descriptions/_ [
http://www.treasury.gov/initiatives/eesa/program-descriptions/ ].
*
Guidelines for Targeted Investment Program
*
The United States Department of the Treasury will determine
eligibility of participants and allocation of resources under the
Emergency Economic Stabilization Act (EESA) pursuant to the Targeted
Investment Program. Financial Institutions (as defined in EESA) will
be considered for participation in the Targeted Investment Program on
a case-by-case basis. There is no deadline for participation in this
program.
*
Justification
*
The objective of this program is to foster financial market stability
and thereby to strengthen the economy and protect American jobs,
savings, and retirement security. In an environment of high volatility
and severe financial market strains, the loss of confidence in a
financial institution could result in significant market disruptions
that threaten the financial strength of similarly situated financial
institutions and thus impair broader financial markets and pose a
threat to the overall economy. The resulting financial strains could
threaten the viability of otherwise financially sound businesses,
institutions, and municipalities, resulting in adverse spillovers on
employment, output, and incomes.
*
Eligibility Considerations
*
In determining whether an institution is eligible for participation,
Treasury may consider, among other things:
* The extent to which destabilization of the institution could
threaten the viability of creditors and counterparties exposed to the
institution, whether directly or indirectly;
* The extent to which an institution is at risk of a loss of
confidence and the degree to which that stress is caused by a
distressed or illiquid portfolio of assets;
* The number and size of financial institutions that are similarly
situated, or that would be likely to be affected by destabilization of
the institution being considered for the program;
* Whether the institution is sufficiently important to the nation's
financial and economic system that a loss of confidence in the firm's
financial position could potentially cause major disruptions to credit
markets or payments and settlement systems, destabilize asset prices,
significantly increase uncertainty, or lead to similar losses of
confidence or financial market stability that could materially weaken
overall economic performance; and
* The extent to which the institution has access to alternative
sources of capital and liquidity, whether from the private sector or
from other sources of government funds.
In making these judgments, Treasury will obtain and consider
information from a variety of sources, and will take into account
recommendations received from the institution's primary regulator, if
applicable, or from other regulatory bodies and private parties that
could provide insight into the potential consequences if confidence in
a particular institution deteriorated.
*
Form, Terms, and Conditions of Treasury Investment
*
Treasury will determine the form, terms, and conditions of any
investment made pursuant to this program on a case-by-case basis in
accordance with the considerations mandated in EESA. Treasury may
invest in any financial instrument, including debt, equity, or
warrants, that the Secretary of the Treasury determines to be a
troubled asset, after consultation with the Chairman of the Board of
Governors of the Federal Reserve System and notice to Congress.
Treasury will require any institution participating in this program to
provide Treasury with warrants or alternative consideration, as
necessary, to minimize the long-term costs and maximize the benefits
to the taxpayers in accordance with EESA. Treasury will also require
any institution participating in the program to adhere to rigorous
executive compensation standards. In addition, Treasury will consider
other measures, including limitations on the institution's
expenditures, or other corporate governance requirements, to protect
the taxpayers' interests.
These program guidelines are being published in accordance with the
requirements of Section 101(d) of EESA.
*
-30-
*
Message: 2 From: U.S. Department of the Treasury
<subscriptions@subscriptions.treas.gov> Date: Mon, 5 Jan 2009 16:20:25
-0600 (CST) Subject: U.S. International Reserve Position
U.S. International Reserve Position [
http://www.treas.gov/press/releases/200915163526983.htm ]
January 5, 2009
2009-1-5-16-35-26-983
*U.S. International Reserve Position*
The Treasury Department today released U.S. reserve assets data for
the latest week. As indicated in this table, U.S. reserve assets
totaled $76,272 million as of the end of that week, compared to
$74,292 million as of the end of the prior week.
I. Official reserve assets and other foreign currency assets
(approximate market value, in US millions)
December 12, 2008
A. Official reserve assets (in US millions unless otherwise specified) 1
Euro
Yen
Total
(1) Foreign currency reserves (in convertible foreign currencies)
76,272
(a) Securities
9,046
14,112
23,158
of which: issuer headquartered in reporting country but located abroad
0
(b) total currency and deposits with:
(i) other national central banks, BIS and IMF
10,633
6,943
17,576
ii) banks headquartered in the reporting country
0
of which: located abroad
0
(iii) banks headquartered outside the reporting country
0
of which: located in the reporting country
0
(2) IMF reserve position 2
7,487
(3) SDRs 2
9,199
(4) gold (including gold deposits and, if appropriate, gold swapped) 3
11,041
--volume in millions of fine troy ounces
261.499
(5) other reserve assets (specify)
7,811
--financial derivatives
--loans to nonbank nonresidents
--other (foreign currency assets invested through reverse repurchase agreements)
7,811
B. Other foreign currency assets (specify)
--securities not included in official reserve assets
--deposits not included in official reserve assets
--loans not included in official reserve assets
--financial derivatives not included in official reserve assets
--gold not included in official reserve assets
--other
II. Predetermined short-term net drains on foreign currency assets
(nominal value)
Maturity breakdown (residual maturity)
Total
Up to 1 month
More than 1 and up to 3 months
More than 3 months and up to 1 year
1. Foreign currency loans, securities, and deposits
--outflows (-)
Principal
Interest
--inflows (+)
Principal
Interest
2. Aggregate short and long positions in forwards and futures in
foreign currencies vis-a-vis the domestic currency (including the
forward leg of currency swaps)
(a) Short positions ( - ) 4
-566,051
-261,149
-304,902
(b) Long positions (+)
3. Other (specify)
--outflows related to repos (-)
--inflows related to reverse repos (+)
--trade credit (-)
--trade credit (+)
--other accounts payable (-)
--other accounts receivable (+)
III. Contingent short-term net drains on foreign currency assets (nominal value)
Maturity breakdown (residual maturity, where applicable)
Total
Up to 1 month
More than 1 and up to 3 months
More than 3 months and up to 1 year
1. Contingent liabilities in foreign currency
(a) Collateral guarantees on debt falling due within 1 year
(b) Other contingent liabilities
2. Foreign currency securities issued with embedded options (puttable bonds)
3. Undrawn, unconditional credit lines provided by:
(a) other national monetary authorities, BIS, IMF, and other
international organizations
--other national monetary authorities (+)
--BIS (+)
--IMF (+)
(b) with banks and other financial institutions headquartered in the
reporting country (+)
(c) with banks and other financial institutions headquartered outside
the reporting country (+)
Undrawn, unconditional credit lines provided to:
(a) other national monetary authorities, BIS, IMF, and other
international organizations
--other national monetary authorities (-)
--BIS (-)
--IMF (-)
(b) banks and other financial institutions headquartered in reporting
country (- )
(c) banks and other financial institutions headquartered outside the
reporting country ( - )
4. Aggregate short and long positions of options in foreign currencies
vis-a-vis the domestic currency
(a) Short positions
(i) Bought puts
(ii) Written calls
(b) Long positions
(i) Bought calls
(ii) Written puts
PRO MEMORIA: In-the-money options 11 [
http://www.imf.org/external/np/sta/ir/usa/eng/curusa.htm#11 ]
(1) At current exchange rate
(a) Short position
(b) Long position
(2) + 5 % (depreciation of 5%)
(a) Short position
(b) Long position
(3) - 5 % (appreciation of 5%)
(a) Short position
(b) Long position
(4) +10 % (depreciation of 10%)
(a) Short position
(b) Long position
(5) - 10 % (appreciation of 10%)
(a) Short position
(b) Long position
(6) Other (specify)
(a) Short position
(b) Long position
IV. Memo items
(1) To be reported with standard periodicity and timeliness: [
http://www.imf.org/external/np/sta/ir/usa/eng/curusa.htm#12 ]
(a) short-term domestic currency debt indexed to the exchange rate
(b) financial instruments denominated in foreign currency and settled
by other means (e.g., in domestic currency) [
http://www.imf.org/external/np/sta/ir/usa/eng/curusa.htm#13 ]
--nondeliverable forwards
--short positions
--long positions
--other instruments
(c) pledged assets [
http://www.imf.org/external/np/sta/ir/usa/eng/curusa.htm#14 ]
--included in reserve assets
--included in other foreign currency assets
(d) securities lent and on repo [
http://www.imf.org/external/np/sta/ir/usa/eng/curusa.htm#15 ]
7,967
--lent or repoed and included in Section I
--lent or repoed but not included in Section I
--borrowed or acquired and included in Section I
--borrowed or acquired but not included in Section I
7,967
(e) financial derivative assets (net, marked to market)
--forwards
--futures
--swaps
--options
--other
(f) derivatives (forward, futures, or options contracts) that have a
residual maturity greater than one year, which are subject to margin
calls.
--aggregate short and long positions in forwards and futures in
foreign currencies vis-a-vis the domestic currency (including the
forward leg of currency swaps)
(a) short positions ( - )
(b) long positions (+)
--aggregate short and long positions of options in foreign currencies
vis-a-vis the domestic currency
(a) short positions
(i) bought puts
(ii) written calls
(b) long positions
(i) bought calls
(ii) written puts
(2) To be disclosed less frequently:
(a) currency composition of reserves (by groups of currencies)
76,272
--currencies in SDR basket
76,272
2--currencies not in SDR basket
--by individual currencies (optional)
*Notes:*
1/ Includes holdings of the Treasury's Exchange Stabilization Fund
(ESF) and the Federal Reserve's System Open Market Account (SOMA),
valued at current market exchange rates. Foreign currency holdings
listed as securities reflect marked-to-market values, and deposits
reflect carrying values.
2/ The items, "2. IMF Reserve Position" and "3. Special Drawing Rights
(SDRs)," are based on data provided by the IMF and are valued in
dollar terms at the official SDR/dollar exchange rate for the
reporting date. The entries for the latest week reflect any necessary
adjustments, including revaluation, by the U.S. Treasury to IMF data
for the prior month end.
3/ Gold stock is valued monthly at $42.2222 per fine troy ounce.
4/ The short positions reflect foreign exchange acquired under
reciprocal currency arrangements with certain foreign central banks.
The foreign exchange acquired is not included in Section I, "official
reserve assets and other foreign currency assets," of the template for
reporting international reserves. However, it is included in the
broader balance of payments presentation as "U.S. Government assets,
other than official reserve assets/U.S. foreign currency holdings and
U.S. short-term assets."
Message: 3 From: U.S. Department of the Treasury
<subscriptions@subscriptions.treas.gov> Date: Mon, 5 Jan 2009 16:20:26
-0600 (CST) Subject: Treasury Provides TARP Funds to Local Banks
Treasury Provides TARP Funds to Local Banks [
http://www.treas.gov/press/releases/hp1339.htm ]
"To view or print the PDF content on this page, download the free
Adobe(R) Acrobat(R) Reader(R) [
http://www.adobe.com/products/acrobat/readstep.html ]."
January 5, 2009
hp1339
*Treasury Provides TARP Funds to Local Banks*
*
Washington*- The U.S. Treasury Department announced details this week
of a $15 billion investment in 7 banks made through its Capital
Purchase Program
Treasury created the Capital Purchase Program, a part of the Troubled
Asset Relief Program, to help to stabilize and strengthen the U.S.
financial system. Treasury allocated $250 billion under TARP's Capital
Purchase Program to invest in U.S. financial institutions. To date,
the Department has made $177.5 billion of investments, receiving
preferred stock and warrants from participating institutions.
Investments have ranged from as small as $1.5 million to as large as
$25 billion, financing community banking and Community Development
Financial Institutions in 41 states and Puerto Rico.
Institutions that sell shares to the government must comply with
_restrictions on executive compensation_ [
http://www.treas.gov/press/releases/hp1208htm ] during the period that
Treasury holds equity issued through this program and agree to
limitations on dividends and stock repurchases. Information about
Treasury's Troubled Asset Relief Program can be found at
_http://www.treas.gov/initiatives/eesa/_ [
http://www.treas.gov/initiatives/eesa/ ].
Following are the transaction details:
*
**
-30-
*
*REPORTS*
* Treasury announced the following transaction details today (PDF) [
http://www.treas.gov/press/releases/reports/10508cpptable.pdf ]
Message: 4 From: U.S. Department of the Treasury
<subscriptions@subscriptions.treas.gov> Date: Fri, 16 Jan 2009
08:06:26 -0600 (CST) Subject: U.S. Government Finalizes Terms of Citi
Guarantee Announced in November
U.S. Government Finalizes Terms of Citi Guarantee Announced in
November [ http://www.treas.gov/press/releases/hp1358.htm ]
January 16, 2009
hp-1358
*U.S. Government Finalizes Terms of Citi Guarantee Announced in November*
*
Washington, DC -* The Treasury Department, Federal Reserve and the
Federal Deposit Insurance Corporation have finalized the terms of the
guarantee agreement with Citigroup that was previously _announced on
November 23, 2008_ [ http://www.treasury.gov/press/releases/hp1287.htm
]. The agreement provides protection against the possibility of
unusually large losses on an asset pool of approximately $301 billion
of loans and securities backed by residential and commercial real
estate and other such assets, which will remain on Citigroup's balance
sheet.
The capital investment finalized last month and asset protections
finalized today provide support as Citigroup executes its ongoing
restructuring plans. This agreement was previously announced on
November 23, 2008. No new money has been committed today and no
government funds have been transferred. The U.S. government will
continue efforts to strengthen our banking institutions and support
financial markets.
*
-30-
*
Message: 5 From: U.S. Department of the Treasury
<subscriptions@subscriptions.treas.gov> Date: Tue, 27 Jan 2009
09:40:14 -0600 (CST) Subject: Treasury Secretary Announces New Rules
to Limit Lobbyist Influence In federal Investment Decisions
Treasury Secretary Announces New Rules to Limit Lobbyist Influence In
federal Investment Decisions [
http://www.treas.gov/press/releases/tg02.htm ]
January 27, 2009
TG-02
* Treasury Secretary Opens Term Opens With New Rules
To Bolster Transparency, Limit
Lobbyist Influence in Federal investment Decisions*
*Washington, DC* - In light of President Barack Obama's firm
commitment to transparency, accountability and oversight in our
government's approach to stabilizing the financial system, U.S.
Treasury Secretary Tim Geithner today announced several key reforms to
the Emergency Economic Stabilization Act (EESA). As one of his first
acts as the 75th Treasury Secretary, Secretary Geithner outlined new,
stepped up rules designed to limit the influence of lobbyists and
special interests in the EESA process and ensure that investment
decisions are guided by objective assessments in the best interest of
the health and stability of the financial system.
"American taxpayers deserve to know that their money is spent in the
most effective way to stabilize the financial system. Today's actions
reaffirm our commitment toward that goal," said Secretary Geithner.
Today's announcement builds on several reforms to the EESA previously
outlined by President Obama, including monitoring and tracking lending
patterns by financial institutions, limiting executive compensation,
and preventing shareholders from being unduly rewarded at taxpayer
expense. These new rules go beyond the approach taken under the EESA
to date and will help ensure a new level of openness and
accountability going forward.
The new rules include:
*_Combating lobbyist influence in the EESA process:_** *The Treasury
Department will implement safeguards to prevent lobbyist influence
over the program, including restricting contacts with lobbyists in
connection with applications for, or disbursements of, EESA funds.
*_Keeping politics out of funding decisions:_* The Treasury
Department will ensure that political influence does not interfere
with EESA decision making, using as a model for these protections the
limits on political influence over tax matters.
*_Certification to Congress on objective decision making:_* In
reporting to Congress, the Office of Financial Stability (OFS) will
certify that each investment decision is based only on investment
criteria and the facts of the case.
*_The investment process will be transparent and based on objective
criteria_**: *
* Only banks recommended by the primary bank regulator will be
eligible for capital investments.
* OFS will publish a detailed description of the investment review
process undertaken by the regulators and OFS.
* The Treasury Department will ensure adequate resources exist to
process applications as quickly as possible with priority to the date
of the application as received by OFS and will formulate procedures to
ensure integrity and regularity in the application process.
*-30-*
Message: 6 From: U.S. Department of the Treasury
<subscriptions@subscriptions.treas.gov> Date: Thu, 29 Jan 2009
11:23:11 -0600 (CST) Subject: U.S. Department of the Treasury Civil
Penalties Update
Office of Foreign Assets Control
You are subscribed to the Office of Foreign Assets Control's Civil
Penalties Information notification service at the U.S. Department of
the Treasury. New information on OFAC Civil Penalties and Informal
Settlements is now available [
http://service.govdelivery.com/service/view.html?code=USTREAS_93 ].
For more information on this specific action, please visit our Recent
Actions page at http://www.treas.gov/offices/enforcement/ofac/actions
Message: 7 From: U.S. Department of the Treasury
<subscriptions@subscriptions.treas.gov> Date: Fri, 2 Jan 2009 13:20:32
-0600 (CST) Subject: Treasury Releases Emergency Economic
Stabilization Report
Treasury Releases Emergency Economic Stabilization Report [
http://www.treas.gov/press/releases/hp1337.htm ]
"To view or print the PDF content on this page, download the free
Adobe(R) Acrobat(R) Reader(R) [
http://www.adobe.com/products/acrobat/readstep.html ]."
January 2, 2009
HP-1337
*Treasury Releases Emergency Economic Stabilization Report*
*
Washington -* Treasury today released the attached report, required by
section 102 of the Emergency Economic Stabilization Act. As required
by section 102(a), Treasury established the Asset Guarantee Program to
provide guarantees for assets held by systemically significant
financial institutions that face a high risk of losing market
confidence due in large part to a portfolio of distressed or illiquid
assets.
This program would be utilized as needed to improve market confidence
in a systemically significant institution and in financial markets
broadly and it is not anticipated that the program will be made widely
available.
*
-30-
*
*REPORTS*
* Report [ http://www.treas.gov/press/releases/reports/0010208 sect 102.pdf ]
Message: 8 From: U.S. Department of the Treasury
<subscriptions@subscriptions.treas.gov> Date: Fri, 2 Jan 2009 14:01:33
-0600 (CST) Subject: Treasury Department Public Engagements Schedule
Treasury Department Public Engagements Schedule [
http://www.treas.gov/press/schedule.html ]
January 2, 2009
PublicSchedule
*Public Schedule*
*FOR JANUARY 3, 2009 - JANUARY 9, 2009*
*Tuesday, January 6, 2009, 2:00 p.m. EST
*Deputy Assistant Secretary for Financial Education Dan Iannicola, Jr.
President's Advisory Council on Financial Literacy Meeting
Department of the Treasury
Media Room (4121)
1500 Pennsylvania Avenue, NW
Washington, D.C.
Note: Media without Treasury press credentials should contact Frances
Anderson at (202) 622-2960, or Frances.Anderson@do.treas.gov with the
following information: full name, Social Security number, and date of
birth.
*Wednesday, January 7, 2009, 12:00 p.m. EST
*Secretary Henry M. Paulson, Jr.
Remarks on the Role of the GSEs in Supporting the Housing Recovery
The Economic Club
J.W. Marriott Grand Ballroom
1331 Pennsylvania Avenue, NW
Washington, D.C.
Note: Media must pre-register with Judi Irastorza at
media@economicclub.org or 703-765-6881. Cameras must be set by 11:30
a.m.
"*-30-*"
Message: 9 From: U.S. Department of the Treasury
<subscriptions@subscriptions.treas.gov> Date: Mon, 5 Jan 2009 16:01:18
-0600 (CST) Subject: U.S. Department of the Treasury Miscellaneous
Items, Quick Notice Sales (IRS) Update
You are subscribed to Miscellaneous Items, Quick Notice Sales (IRS)
for U.S Department of the Treasury. This information has recently been
updated, and is now available [
http://service.govdelivery.com/service/view.html?code=USTREAS_110 ].
Message: 10 From: U.S. Department of the Treasury
<subscriptions@subscriptions.treas.gov> Date: Mon, 5 Jan 2009 16:03:26
-0600 (CST) Subject: U.S. Department of the Treasury
Commercial/Industrial Property, Equipment and Supplies (IRS) Update
You are subscribed to Commercial/Industrial Property, Equipment and
Supplies (IRS) for U.S. Department of the Treasury. This information
has recently been updated, and is now available [
http://service.govdelivery.com/service/view.html?code=USTREAS_17 ].
Message: 11 From: U.S. Department of the Treasury
<subscriptions@subscriptions.treas.gov> Date: Mon, 5 Jan 2009 16:20:23
-0600 (CST) Subject: U.S. International Reserve Position
U.S. International Reserve Position [
http://www.treas.gov/press/releases/200915163047912.htm ]
January 5, 2009
2009-1-5-16-30-47-912
*U.S. International Reserve Position*
The Treasury Department today released U.S. reserve assets data for
the latest week. As indicated in this table, U.S. reserve assets
totaled $78,199 million as of the end of that week, compared to
$76,272 million as of the end of the prior week.
I. Official reserve assets and other foreign currency assets
(approximate market value, in US millions)
December 19, 2008
A. Official reserve assets (in US millions unless otherwise specified) 1
Euro
Yen
Total
(1) Foreign currency reserves (in convertible foreign currencies)
78,199
(a) Securities
9,483
14,417
23,900
of which: issuer headquartered in reporting country but located abroad
0
(b) total currency and deposits with:
(i) other national central banks, BIS and IMF
11,058
7,083
18,141
ii) banks headquartered in the reporting country
0
of which: located abroad
0
(iii) banks headquartered outside the reporting country
0
of which: located in the reporting country
0
(2) IMF reserve position 2
7,626
(3) SDRs 2
9,369
(4) gold (including gold deposits and, if appropriate, gold swapped) 3
11,041
--volume in millions of fine troy ounces
261.499
(5) other reserve assets (specify)
8,122
--financial derivatives
--loans to nonbank nonresidents
--other (foreign currency assets invested through reverse repurchase agreements)
8,122
B. Other foreign currency assets (specify)
--securities not included in official reserve assets
--deposits not included in official reserve assets
--loans not included in official reserve assets
--financial derivatives not included in official reserve assets
--gold not included in official reserve assets
--other
II. Predetermined short-term net drains on foreign currency assets
(nominal value)
Maturity breakdown (residual maturity)
Total
Up to 1 month
More than 1 and up to 3 months
More than 3 months and up to 1 year
1. Foreign currency loans, securities, and deposits
--outflows (-)
Principal
Interest
--inflows (+)
Principal
Interest
2. Aggregate short and long positions in forwards and futures in
foreign currencies vis-a-vis the domestic currency (including the
forward leg of currency swaps)
(a) Short positions ( - ) 4
-537,402
-247,397
-290,005
(b) Long positions (+)
3. Other (specify)
--outflows related to repos (-)
--inflows related to reverse repos (+)
--trade credit (-)
--trade credit (+)
--other accounts payable (-)
--other accounts receivable (+)
III. Contingent short-term net drains on foreign currency assets (nominal value)
Maturity breakdown (residual maturity, where applicable)
Total
Up to 1 month
More than 1 and up to 3 months
More than 3 months and up to 1 year
1. Contingent liabilities in foreign currency
(a) Collateral guarantees on debt falling due within 1 year
(b) Other contingent liabilities
2. Foreign currency securities issued with embedded options (puttable bonds)
3. Undrawn, unconditional credit lines provided by:
(a) other national monetary authorities, BIS, IMF, and other
international organizations
--other national monetary authorities (+)
--BIS (+)
--IMF (+)
(b) with banks and other financial institutions headquartered in the
reporting country (+)
(c) with banks and other financial institutions headquartered outside
the reporting country (+)
Undrawn, unconditional credit lines provided to:
(a) other national monetary authorities, BIS, IMF, and other
international organizations
--other national monetary authorities (-)
--BIS (-)
--IMF (-)
(b) banks and other financial institutions headquartered in reporting
country (- )
(c) banks and other financial institutions headquartered outside the
reporting country ( - )
4. Aggregate short and long positions of options in foreign currencies
vis-a-vis the domestic currency
(a) Short positions
(i) Bought puts
(ii) Written calls
(b) Long positions
(i) Bought calls
(ii) Written puts
PRO MEMORIA: In-the-money options 11 [
http://www.imf.org/external/np/sta/ir/usa/eng/curusa.htm#11 ]
(1) At current exchange rate
(a) Short position
(b) Long position
(2) + 5 % (depreciation of 5%)
(a) Short position
(b) Long position
(3) - 5 % (appreciation of 5%)
(a) Short position
(b) Long position
(4) +10 % (depreciation of 10%)
(a) Short position
(b) Long position
(5) - 10 % (appreciation of 10%)
(a) Short position
(b) Long position
(6) Other (specify)
(a) Short position
(b) Long position
IV. Memo items
(1) To be reported with standard periodicity and timeliness: [
http://www.imf.org/external/np/sta/ir/usa/eng/curusa.htm#12 ]
(a) short-term domestic currency debt indexed to the exchange rate
(b) financial instruments denominated in foreign currency and settled
by other means (e.g., in domestic currency) [
http://www.imf.org/external/np/sta/ir/usa/eng/curusa.htm#13 ]
--nondeliverable forwards
--short positions
--long positions
--other instruments
(c) pledged assets [
http://www.imf.org/external/np/sta/ir/usa/eng/curusa.htm#14 ]
--included in reserve assets
--included in other foreign currency assets
(d) securities lent and on repo [
http://www.imf.org/external/np/sta/ir/usa/eng/curusa.htm#15 ]
8,284
--lent or repoed and included in Section I
--lent or repoed but not included in Section I
--borrowed or acquired and included in Section I
--borrowed or acquired but not included in Section I
8,284
(e) financial derivative assets (net, marked to market)
--forwards
--futures
--swaps
--options
--other
(f) derivatives (forward, futures, or options contracts) that have a
residual maturity greater than one year, which are subject to margin
calls.
--aggregate short and long positions in forwards and futures in
foreign currencies vis-a-vis the domestic currency (including the
forward leg of currency swaps)
(a) short positions ( - )
(b) long positions (+)
--aggregate short and long positions of options in foreign currencies
vis-a-vis the domestic currency
(a) short positions
(i) bought puts
(ii) written calls
(b) long positions
(i) bought calls
(ii) written puts
(2) To be disclosed less frequently:
(a) currency composition of reserves (by groups of currencies)
78,199
--currencies in SDR basket
78,199
2--currencies not in SDR basket
--by individual currencies (optional)
*Notes:*
1/ Includes holdings of the Treasury's Exchange Stabilization Fund
(ESF) and the Federal Reserve's System Open Market Account (SOMA),
valued at current market exchange rates. Foreign currency holdings
listed as securities reflect marked-to-market values, and deposits
reflect carrying values.
2/ The items, "2. IMF Reserve Position" and "3. Special Drawing Rights
(SDRs)," are based on data provided by the IMF and are valued in
dollar terms at the official SDR/dollar exchange rate for the
reporting date. The entries for the latest week reflect any necessary
adjustments, including revaluation, by the U.S. Treasury to IMF data
for the prior month end.
3/ Gold stock is valued monthly at $42.2222 per fine troy ounce.
4/ The short positions reflect foreign exchange acquired under
reciprocal currency arrangements with certain foreign central banks.
The foreign exchange acquired is not included in Section I, "official
reserve assets and other foreign currency assets," of the template for
reporting international reserves. However, it is included in the
broader balance of payments presentation as "U.S. Government assets,
other than official reserve assets/U.S. foreign currency holdings and
U.S. short-term assets."
Message: 12 From: U.S. Department of the Treasury
<subscriptions@subscriptions.treas.gov> Date: Tue, 6 Jan 2009 09:20:38
-0600 (CST) Subject: U.S. International Reserve Position
U.S. International Reserve Position [
http://www.treas.gov/press/releases/irp01062009.htm ]
January 6, 2009
IRP-01062009
*U.S. International Reserve Position*
The Treasury Department today released U.S. reserve assets data for
the latest week. As indicated in this table, U.S. reserve assets
totaled $78,334 million as of the end of that week, compared to
$78,199 million as of the end of the prior week.
I. Official reserve assets and other foreign currency assets
(approximate market value, in US millions)
December 26, 2008
A. Official reserve assets (in US millions unless otherwise specified) 1
Euro
Yen
Total
(1) Foreign currency reserves (in convertible foreign currencies)
78,334
(a) Securities
9,630
14,254
23,884
of which: issuer headquartered in reporting country but located abroad
0
(b) total currency and deposits with:
(i) other national central banks, BIS and IMF
11,212
6,977
18,189
ii) banks headquartered in the reporting country
0
of which: located abroad
0
(iii) banks headquartered outside the reporting country
0
of which: located in the reporting country
0
(2) IMF reserve position 2
7,622
(3) SDRs 2
9,365
(4) gold (including gold deposits and, if appropriate, gold swapped) 3
11,041
--volume in millions of fine troy ounces
261.499
(5) other reserve assets (specify)
8,234
--financial derivatives
--loans to nonbank nonresidents
--other (foreign currency assets invested through reverse repurchase agreements)
8,234
B. Other foreign currency assets (specify)
--securities not included in official reserve assets
--deposits not included in official reserve assets
--loans not included in official reserve assets
--financial derivatives not included in official reserve assets
--gold not included in official reserve assets
--other
II. Predetermined short-term net drains on foreign currency assets
(nominal value)
Maturity breakdown (residual maturity)
Total
Up to 1 month
More than 1 and up to 3 months
More than 3 months and up to 1 year
1. Foreign currency loans, securities, and deposits
--outflows (-)
Principal
Interest
--inflows (+)
Principal
Interest
2. Aggregate short and long positions in forwards and futures in
foreign currencies vis-a-vis the domestic currency (including the
forward leg of currency swaps)
(a) Short positions ( - ) 4
-552,728
-278,253
-274,475
(b) Long positions (+)
3. Other (specify)
--outflows related to repos (-)
--inflows related to reverse repos (+)
--trade credit (-)
--trade credit (+)
--other accounts payable (-)
--other accounts receivable (+)
III. Contingent short-term net drains on foreign currency assets (nominal value)
Maturity breakdown (residual maturity, where applicable)
Total
Up to 1 month
More than 1 and up to 3 months
More than 3 months and up to 1 year
1. Contingent liabilities in foreign currency
(a) Collateral guarantees on debt falling due within 1 year
(b) Other contingent liabilities
2. Foreign currency securities issued with embedded options (puttable bonds)
3. Undrawn, unconditional credit lines provided by:
(a) other national monetary authorities, BIS, IMF, and other
international organizations
--other national monetary authorities (+)
--BIS (+)
--IMF (+)
(b) with banks and other financial institutions headquartered in the
reporting country (+)
(c) with banks and other financial institutions headquartered outside
the reporting country (+)
Undrawn, unconditional credit lines provided to:
(a) other national monetary authorities, BIS, IMF, and other
international organizations
--other national monetary authorities (-)
--BIS (-)
--IMF (-)
(b) banks and other financial institutions headquartered in reporting
country (- )
(c) banks and other financial institutions headquartered outside the
reporting country ( - )
4. Aggregate short and long positions of options in foreign currencies
vis-a-vis the domestic currency
(a) Short positions
(i) Bought puts
(ii) Written calls
(b) Long positions
(i) Bought calls
(ii) Written puts
PRO MEMORIA: In-the-money options 11 [
http://www.imf.org/external/np/sta/ir/usa/eng/curusa.htm#11 ]
(1) At current exchange rate
(a) Short position
(b) Long position
(2) + 5 % (depreciation of 5%)
(a) Short position
(b) Long position
(3) - 5 % (appreciation of 5%)
(a) Short position
(b) Long position
(4) +10 % (depreciation of 10%)
(a) Short position
(b) Long position
(5) - 10 % (appreciation of 10%)
(a) Short position
(b) Long position
(6) Other (specify)
(a) Short position
(b) Long position
IV. Memo items
(1) To be reported with standard periodicity and timeliness: [
http://www.imf.org/external/np/sta/ir/usa/eng/curusa.htm#12 ]
(a) short-term domestic currency debt indexed to the exchange rate
(b) financial instruments denominated in foreign currency and settled
by other means (e.g., in domestic currency) [
http://www.imf.org/external/np/sta/ir/usa/eng/curusa.htm#13 ]
--nondeliverable forwards
--short positions
--long positions
--other instruments
(c) pledged assets [
http://www.imf.org/external/np/sta/ir/usa/eng/curusa.htm#14 ]
--included in reserve assets
--included in other foreign currency assets
(d) securities lent and on repo [
http://www.imf.org/external/np/sta/ir/usa/eng/curusa.htm#15 ]
8,364
--lent or repoed and included in Section I
--lent or repoed but not included in Section I
--borrowed or acquired and included in Section I
--borrowed or acquired but not included in Section I
8,364
(e) financial derivative assets (net, marked to market)
--forwards
--futures
--swaps
--options
--other
(f) derivatives (forward, futures, or options contracts) that have a
residual maturity greater than one year, which are subject to margin
calls.
--aggregate short and long positions in forwards and futures in
foreign currencies vis-a-vis the domestic currency (including the
forward leg of currency swaps)
(a) short positions ( - )
(b) long positions (+)
--aggregate short and long positions of options in foreign currencies
vis-a-vis the domestic currency
(a) short positions
(i) bought puts
(ii) written calls
(b) long positions
(i) bought calls
(ii) written puts
(2) To be disclosed less frequently:
(a) currency composition of reserves (by groups of currencies)
78,334
--currencies in SDR basket
78,334
2--currencies not in SDR basket
--by individual currencies (optional)
*Notes:*
1/ Includes holdings of the Treasury's Exchange Stabilization Fund
(ESF) and the Federal Reserve's System Open Market Account (SOMA),
valued at current market exchange rates. Foreign currency holdings
listed as securities reflect marked-to-market values, and deposits
reflect carrying values.
2/ The items, "2. IMF Reserve Position" and "3. Special Drawing Rights
(SDRs)," are based on data provided by the IMF and are valued in
dollar terms at the official SDR/dollar exchange rate for the
reporting date. The entries for the latest week reflect any necessary
adjustments, including revaluation, by the U.S. Treasury to IMF data
for the prior month end.
3/ Gold stock is valued monthly at $42.2222 per fine troy ounce.
4/ The short positions reflect foreign exchange acquired under
reciprocal currency arrangements with certain foreign central banks.
The foreign exchange acquired is not included in Section I, "official
reserve assets and other foreign currency assets," of the template for
reporting international reserves. However, it is included in the
broader balance of payments presentation as "U.S. Government assets,
other than official reserve assets/U.S. foreign currency holdings and
U.S. short-term assets."
Message: 13 From: U.S. Department of the Treasury
<subscriptions@subscriptions.treas.gov> Date: Tue, 6 Jan 2009 09:40:13
-0600 (CST) Subject: Asst Sec Swagel to Hold Monthly Economic Briefing
Asst Sec Swagel to Hold Monthly Economic Briefing [
http://www.treas.gov/press/releases/hp1340.htm ]
January 6, 2009
HP-1340
*Assistant Secretary Swagel to Hold Monthly Economic Briefing*
Assistant Secretary for Economic Policy Phillip Swagel will hold a
media briefing Friday to review economic indicators from the last
month and discuss the state of the U.S. economy. The event is open to
the media:
*Who*
Assistant Secretary for Economic Policy Phillip Swagel
*What
*Monthly Economic Briefing
*When*
Friday, January 9, 11:00 a.m. EST
*Where*
Treasury Department
Media Room (4121)
1500 Pennsylvania Avenue, NW
Washington, D.C.
*Note*
Media without Treasury press credentials should contact Frances
Anderson at (202) 622-2960, or Frances.Anderson@do.treas.gov with the
following information: full name, Social Security number, and date of
birth.
*-30-*
Message: 14 From: U.S. Department of the Treasury
<subscriptions@subscriptions.treas.gov> Date: Tue, 6 Jan 2009 10:40:07
-0600 (CST) Subject: Treasury Department Public Engagements Schedule
Treasury Department Public Engagements Schedule [
http://www.treas.gov/press/schedule.html ]
January 6, 2009
PublicSchedule
*Public Schedule*
*FOR JANUARY 3, 2009 - JANUARY 9, 2009*
**Revised Tuesday, January 6, 11:00 a.m. EST
*(Adds Swagel Economic Briefing)
*Tuesday, January *6, 2009, 2:00 p.m. EST
Deputy Assistant Secretary for Financial Education Dan Iannicola, Jr.
President's Advisory Council on Financial Literacy Meeting
Department of the Treasury
Media Room (4121)
1500 Pennsylvania Avenue, NW
Washington, D.C.
Note: Media without Treasury press credentials should contact Frances
Anderson at (202) 622-2960, or Frances.Anderson@do.treas.gov with the
following information: full name, Social Security number, and date of
birth.
*Wednesday, January 7, 2009, 12:00 p.m. EST
*Secretary Henry M. Paulson, Jr.
Remarks on the Role of the GSEs in Supporting the Housing Recovery
Economic Club of Washington, D.C.
J.W. Marriott Grand Ballroom
1331 Pennsylvania Avenue, NW
Washington, D.C.
Note: Media must pre-register with Judi Irastorza at
media@economicclub.org or 703-765-6881. Cameras must be set by 11:30
a.m.
**Friday, January 9, 2009, 11:00 a.m. EST*
Assistant Secretary for Economic Policy Phillip Swagel
Monthly Economic Briefing
Department of the Treasury
Media Room (4121)
1500 Pennsylvania Avenue, NW
Washington, D.C.
Note: Media without Treasury press credentials should contact Frances
Anderson at (202) 622-2960, or Frances.Anderson@do.treas.gov with the
following information: full name, Social Security number, and date of
birth.
*-30-*
Message: 15 From: U.S. Department of the Treasury
<subscriptions@subscriptions.treas.gov> Date: Tue, 6 Jan 2009 10:40:40
-0600 (CST) Subject: Treasury Targets Hizballah Construction Company
Treasury Targets Hizballah Construction Company [
http://www.treas.gov/press/releases/hp1341.htm ]
January 6, 2009
HP-1341
*Treasury Targets Hizballah Construction Company*
Washington, DC--The U.S. Department of the Treasury today designated
the Waad Project, a Hizballah-run construction firm, under Executive
Order 13224 (E.O. 13224), which targets terrorists and those providing
support to terrorists or acts of terrorism.
"The Waad Project is another example of Hizballah's use of deceptive
tactics to support its military and terrorist apparatus," said Under
Secretary for Terrorism and Financial Intelligence Stuart Levey.
Hizballah established the Waad Project, in part, because Jihad
al-Bina--Hizballah's main construction company--had difficulty
receiving funds from donors following its designation under E.O. 13224
by the Treasury Department on February 20, 2007. Hizballah Secretary
General Hasan Nasrallah publicly endorsed the Waad Project in May
2007.
Hizballah has used the Waad Project to rebuild its command
headquarters in Beirut's southern suburbs, which was destroyed in the
summer 2006 conflict with Israel. The Waad Project has built
Hizballah's underground weapons storage facilities and parts of the
group's military infrastructure in Lebanon Additionally, the Waad
Project's website has provided telephone numbers for those wishing to
donate aid to Hizballah, Jihad al-Bina, and the Hizballah-controlled
Martyrs Association, an organization named as a Specially Designated
Global Terrorist in July 2007 for providing financial support to
Hizballah.
The Waad Project has tried to hide its affiliation with Hizballah,
just as Jihad al-Bina used deceptive means to seek funding projects
from international development organizations. Additionally, the
general manager of the Waad Project has stated that donors to the Waad
Project have wished to remain anonymous because Hizballah is a
terrorist organization and they preferred not to be identified due to
the risks of dealings with a terrorist group.
Under E.O. 13224, any assets held by the Waad Project under U.S.
jurisdiction are frozen and U.S. persons are prohibited from engaging
in any transactions with the Waad Project.
*-30-*
*_Identifier Information_*
*WAAD PROJECT
*AKAs:
Wa'id Company
Wa'ed Organization
Waad Waed
Wa'd Project
Al-Waad Al-Sadiq
Waad Company
Waad for Rebuilding the Southern Suburb
`Mashura Waad Laadat Al-Aamar
Waad Project for Reconstruction
Wa'ad As Sadiq
Telephone No. 1
009613679153
Telephone No. 2
009613380223
Telephone No. 3
03889402
Telephone No. 4
03669916
Location No. 1
Harat Hurayk, Lebanon
Location No. 2
Beirut, Lebanon
*-30-*
Message: 16 From: U.S. Department of the Treasury
<subscriptions@subscriptions.treas.gov> Date: Tue, 6 Jan 2009 11:04:17
-0600 (CST) Subject: Treasury Releases Congressional Report on EESA
Treasury Releases Congressional Report on EESA [
http://www.treas.gov/press/releases/hp1342.htm ]
"To view or print the PDF content on this page, download the free
Adobe(R) Acrobat(R) Reader(R) [
http://www.adobe.com/products/acrobat/readstep.html ]."
January 6, 2009
HP-1342
*Treasury Releases Congressional Report on
Emergency Economic Stabilization Act*
*
Washington, DC -* The Treasury Department today released the attached
report, required by section 105(a) of the Emergency Economic
Stabilization Act. The _first in the series of reports_ [
http://www.treasury.gov/initiatives/eesa/congressionalreports.shtml ]
was delivered on December 5, 2008.
*
-30-
*
*REPORTS*
* Report [ http://www.treas.gov/press/releases/reports/0010508 105a
report.pdf ]
Message: 17 From: U.S. Department of the Treasury
<subscriptions@subscriptions.treas.gov> Date: Tue, 6 Jan 2009 11:40:15
-0600 (CST) Subject: Treasury Announces Results of High School
Financial Literacy Challenge
Treasury Announces Results of High School Financial Literacy Challenge
[ http://www.treas.gov/press/releases/hp1343.htm ]
January 6, 2009
HP-1343
*Treasury Announces Results of High School
Financial Literacy Challenge *
*Washington- *The Treasury Department today announced the results of
the fall National Financial Literacy Challenge, a web-based contest
open to high school students across the country. At the recommendation
of the President's Advisory Council on Financial Literacy, the
Department administered the test from November 3 to December 12 to
identify and recognize high school students demonstrating knowledge of
important personal finance concepts.
The first National Challenge was held in May 2008 and attracted 46,000
students. Due to a positive response from teachers, parents, and
students, over 75,000 students participated in the voluntary exam this
round.
"We're pleased with the quick growth of the National Challenge and
hope it continues, but there is additional work left to do. The
`challenge' to parents, teachers, school administrators and policy
makers across the country is to get effective personal finance
education into every classroom, for every student. We owe it to the
members of the next generation to properly equip them for the
financial choices and challenges they will face," said Deputy
Assistant Secretary for Financial Education Dan Iannicola, Jr.
Students who scored in the top 25th percentile received certificates
of recognition and 362 students earned the National Financial Literacy
Award medal for demonstrating exceptional levels of financial literacy
with perfect or near-perfect scores. In addition to the certificates
and medals, each student who obtained a perfect score received a
college scholarship from the Charles Schwab Foundation, with an
additional financial contribution going to each winning student's
school.
Laura Levine, member of the President's Advisory Council and Executive
Director of the Jump$tart Coalition for Personal Finance said, "We're
proud of the students who excelled on the Challenge and the parents
and teachers who taught them about money. The reason the President's
Advisory Council recommended implementing the Challenge was to raise
awareness of the good work by students and teachers in the field of
personal finance and to encourage other schools to follow that
example."
The Challenge's 35 questions are correlated to the National Standards
in K-12 Personal Finance Education published by the Jump$tart
Coalition for Personal Finance in 2007. The questions were developed
in consultation with economists, Junior Achievement USA, the National
Council on Economic Education, the National Endowment for Financial
Education and the Jump$tart Coalition for Personal Financial Literacy.
*-30-*
Message: 18 From: U.S. Department of the Treasury
<subscriptions@subscriptions.treas.gov> Date: Tue, 6 Jan 2009 12:20:05
-0600 (CST) Subject: Treasury Releases Statement on Treasury Markets
Practice Group Proposal
Treasury Releases Statement on Treasury Markets Practice Group
Proposal [ http://www.treas.gov/press/releases/hp1344.htm ]
"To view or print the PDF content on this page, download the free
Adobe(R) Acrobat(R) Reader(R) [
http://www.adobe.com/products/acrobat/readstep.html ]."
January 6, 2009
HP-1344
*Treasury Releases Statement on
Treasury Markets Practice Group Proposal*
*
Washington, DC - *Acting Assistant Secretary for Financial Markets
Karthik Ramanathan released the following statement today on the
recent initiatives to further enhance liquidity in the U.S. Treasury
market:
"Treasury supports private-sector initiatives, such as the measures
announced by the Treasury Markets Practice Group this week, to further
enhance the depth and liquidity of the United States Treasury market.
"We commend the TMPG members for their efforts as well as those of the
Securities Industry and Financial Markets Association and the
Depository Trust and Clearing Corporation in working to implement
these protocols in a timely manner.
"The practical measures recommended by the TMPG should serve to
minimize episodes of chronic fails, promote overall market liquidity,
and enhance the efficiency and operational integrity of the Treasury
marketplace."
TPMG's statement can be found at:
_http://www.newyorkfed.org/tmpg/pr090105cpdf_ [
http://www.newyorkfed.org/tmpg/pr090105c.pdf ]
*
-30-
*
Message: 19 From: U.S. Department of the Treasury
<subscriptions@subscriptions.treas.gov> Date: Wed, 7 Jan 2009 11:20:10
-0600 (CST) Subject: Treasury Department Public Engagements Schedule
Treasury Department Public Engagements Schedule [
http://www.treas.gov/press/schedule.html ]
January 7, 2009
PublicSchedule
*Public Schedule*
*FOR JANUARY 3, 2009 - JANUARY 9, 2009*
**Revised Wednesday, January 7, 12:00 p.m. EST
*(Adds Kashkari remarks.)
**Thursday, January 8, 2009, 1:30 p.m. EST
*Interim Assistant Secretary for Financial Stability Neel Kashkari
Update on TARP Implementation
The Brookings Institution
Falk Auditorium
1775 Massachusetts Avenue, NW
Washington, D.C.
Note: Press should RSVP to Laurie Boeder at (202) 797-6105.
*Friday, January 9, 2009, 11:00 a.m. EST*
Assistant Secretary for Economic Policy Phillip Swagel
Monthly Economic Briefing
Department of the Treasury
Media Room (4121)
1500 Pennsylvania Avenue, NW
Washington, D.C.
Note: Media without Treasury press credentials should contact Frances
Anderson at (202) 622-2960, or Frances.Anderson@do.treas.gov with the
following information: full name, Social Security number, and date of
birth.
*-30-*
Message: 20 From: U.S. Department of the Treasury
<subscriptions@subscriptions.treas.gov> Date: Wed, 7 Jan 2009 11:20:28
-0600 (CST) Subject: Paulson Remarks on the Role of GSEs in Supporting
the Housing Recovery
Paulson Remarks on the Role of GSEs in Supporting the Housing Recovery
[ http://www.treas.gov/press/releases/hp1345.htm ]
January 7, 2009
HP-1345
*Remarks by Treasury Secretary Henry M. Paulson, Jr.
on The Role of the GSEs in Supporting the Housing Recovery
before the Economic Club of Washington*
*
Washington - *Good afternoon. Thank you, David and thanks to the
Washington Economic Club for this opportunity to provide my thoughts
on long-term reform of the housing Government Sponsored Enterprises,
the GSEs, Fannie Mae and Freddie Mac.
Debate over the role and function of these entities has raged for
years. Congress established Fannie and Freddie decades ago to meet a
public policy goal - to increase the funding available for home
mortgage financing. The GSEs achieve this through providing liquidity
to the secondary market for a limited range of home mortgages, either
through credit guarantees on mortgage-backed securities (MBS) or by
directly investing in mortgages and mortgage-related securities
through their retained mortgage portfolios. To further this mission,
their congressional charters grant the GSEs several benefits which
together created a perception that the GSEs were backed by the U.S.
government, even though this was not the case. This "implicit"
government guarantee provided the GSEs with a funding advantage over
other mortgage market participants.
The inherent conflict in this structure is obvious - the GSEs served
both a public mission and private shareholders - they received public
support but operated for private shareholder gain. While policymakers
of every ideological stripe have acknowledged the risks created by
this conflict, entrenched debate, often with little recognition of
market realities, prevented reform. Over time, the GSEs' advantages
enabled them to grow at a phenomenal pace, so that today they have
$5.4 trillion in obligations outstanding, held by investors in the
U.S. and around the world. As a comparison, that is almost 40 percent
the size of the entire $14 trillion U.S. economy. The systemic risk
posed by such size was heightened by the fact that investors assumed
that GSE securities were backed by the U.S. government and therefore
virtually risk-free, despite repeated statements by consecutive U.S.
administrations to the contrary. These debt-holders would be the
largest, but not the only, conduits of systemic impact should either
GSE fail. Derivative counterparties, for example, would also be
overwhelmed by a default of either GSE.
For some time market participants had questioned whether the GSEs were
adequately capitalized for the risk they were taking, and therefore
able to withstand losses without triggering a systemic event.
Policymakers acknowledged that the GSE regulator did not have the
authorities to address these risks, yet they could not reach consensus
to improve it, and instead left a clearly inadequate regulatory
structure in place. When I came to Washington, I saw an opportunity to
improve the regulatory structure, even if it wouldn't be perfect. I
set to work in the fall of 2006 to broker progress in the House, and
we did begin to solve some of the seemingly intractable differences.
Even as Washington debated GSE oversight, there was little debate over
the extent to which government should subsidize homeownership, and
whether such government support was contributing to a housing bubble.
The U.S. government has many policies that subsidize homeownership -
it would be oversimplifying and wrong to blame Fannie and Freddie for
the bubble, but they clearly are part of the public policy bias that
contributed to it.
In sum, the GSE reform debate was largely frozen in place, or moving
at glacial speed. Then suddenly, the unprecedented housing correction
shifted the ground under that debate and forced action.
Today I will review the actions we have taken and their effect, and
address two issues before us. First, in the short-term, how do we use
the GSEs to mitigate the current credit crisis and housing downturn?
Second, given the temporary nature of their current status, how might
we address the appropriate long-term structure?
*
Prelude to Recent Actions Regarding Fannie Mae and Freddie Mac
*
As we progressed through the current housing market downturn,
investors fled mortgages that carried any credit risk. But because the
GSEs take the credit risk on the mortgages they guarantee and because
investors believed there was implicit government backing, the
conforming loan market continued to function relatively well. As a
result, the GSE share of new mortgage business rose from 46 percent in
the second quarter of 2007 to 84 percent in the second quarter of
2008. Without the GSEs to finance mortgages, it was very clear that
mortgage finance would essentially dry up.
However, as the extraordinary housing correction deepened, weaknesses
in these entities became apparent. In July 2008, investors lost
confidence as they became increasingly uncertain about Fannie and
Freddie's capital position. The GSEs' already depressed stock prices
plummeted further. Shareholder losses did not pose a public policy
concern, but the share price drop further weakened confidence among
the holders of the $5.4 trillion of GSE debt and MBS. Investors at
home and abroad were reducing purchases and even selling from their
holdings of GSE debt. The consequences of either GSE failing would be
catastrophic. We couldn't wait for a failure; we had to act
preemptively to shore up confidence in these enterprises.
In July, I requested that Congress quickly complete work on
long-sought GSE regulatory reform and also provide Treasury with
expanded authority to support Fannie, Freddie and the Federal Home
Loan Banks. Congress did so - giving us enormous temporary authorities
to inject capital if the GSEs asked for it, and to create a back up
liquidity facility for GSE debt.
Immediately after passage of the legislation, in coordination with the
Federal Reserve, the newly-constituted GSE regulator, FHFA, and our
advisor Morgan Stanley, we began a comprehensive financial review of
the GSEs. At the same time, mortgage market conditions continued to
deteriorate. Negative earnings announcements by Fannie and Freddie in
August reflected those worsening conditions, and further roiled
markets. Neither company appeared to have any reasonable prospect of
raising private capital to allay those concerns in the foreseeable
future, and our examination found capital to be inadequate - in terms
of both the quality of capital and the embedded losses stemming from
worsening mortgage market conditions.
Confidence in the GSE model was largely shattered. It was clear to me
that simply injecting even a great deal of equity into their business
model would not create the market confidence necessary to fund these
enterprises going forward and to bolster confidence in the $5.4
trillion of extant GSE obligations, which posed the greatest systemic
risk. Market fragility and the GSEs' deteriorating balance sheets
required that we take responsibility for the GSE structural
ambiguities that U.S. policymakers had let fester for decades. If we
had asked Congress for, and received, the power to explicitly
guarantee the GSEs' obligations, we would have done so. But without
that authority, we had to be creative and find a way to effectively
guarantee the GSEs' obligations.
We had to stabilize the situation immediately. We knew that markets
were exceptionally fragile and would be further threatened in
September when we expected that a number of large financial
institutions, including Lehman Brothers, would post disappointing
earnings. Chairman Bernanke, FHFA Director Lockhart and I met almost
daily, over a 10 day period, to work toward a comprehensive action
plan. As I made clear at the time, we sought a temporary solution that
would achieve three goals: (1) stabilize markets, (2) promote mortgage
availability, and (3) protect the taxpayer.
In comprehensive action taken on September 7th, FHFA placed Fannie and
Freddie into conservatorship, enabling Treasury to take creative steps
to support their obligations. We moved quickly to do what was
necessary. Our actions would have been impossible to implement were it
not for the GSE reform legislation that gave FHFA the expanded power
to make qualitative and quantitative judgments about capital and also
gave Treasury the financial authorities necessary to make
conservatorship a stabilizing, as opposed to a destabilizing, event.
We devised Preferred Stock Purchase Agreements to effectively
guarantee the GSEs' obligations by ensuring Fannie and Freddie would
maintain a positive net worth. This commitment ensures that they can
fulfill their financial obligations, even after the temporary
authorities expire in December 2009. Additionally, Treasury
established a new secured lending credit facility intended to serve as
an ultimate liquidity backstop. To further support the availability of
mortgage financing, Treasury initiated a program to purchase GSE MBS
and has purchased over $50 billion thus far.
We took these actions first, to avert the financial market meltdown
that would ensue from the collapse of these institutions and, second,
to allow the GSEs to continue, in the midst of overall market stress,
to perform their essential role of providing mortgage finance. This
conservatorship, with the explicit backing of the federal government,
is temporary and must be resolved for the long-term. In the meantime,
the GSEs must serve the taxpayers' interest by assisting in turning
the corner on the housing correction, which is critical to return
normalcy to the capital markets and resume U.S. economic growth. The
GSEs can facilitate progress through the housing correction by keeping
mortgage rates low and by mitigating foreclosures.
*
Keeping Mortgage Rates Low
*
Lower mortgage rates enable more potential homebuyers to return to the
market and help put a floor under home prices. Initially, following
our September actions, mortgage rates did fall. Market turmoil
subsequently increased and mortgage rates rose, but not nearly as much
as the cost of other forms of credit. Still, neither the taxpayers nor
the economy were getting the full benefit of the agreements put in
place to effectively guarantee GSE debt We could have gone back to
Congress to ask for authority to directly guarantee GSE debt, however
this would have been difficult to achieve. While a simple, direct
government guarantee of GSE MBS might have reduced rates further -
given the extraordinary strains in today's markets it probably would
still have failed to produce all of the desired mortgage rate
reductions. Therefore, we examined other means of deploying our
authorities that could reduce mortgage rates.
We immediately noted that, given the effective government guarantee
and the spread between Treasury rates and those of the GSEs, the
taxpayers would profit if the government simply issued Treasuries to
buy GSE securities. And in fact, we have funded the purchase of GSE
securities with the issuance of Treasury bonds. But to make an impact
on mortgage rates, such an initiative would have to be very large and
those Treasury issuances would count against the debt limit.
On November 25, the Federal Reserve announced a new program to
purchase up to $100 billion in GSE debt securities and $500 billion in
GSE MBS. This Federal Reserve program had a significant impact. The
30-year fixed rate has fallen from an average of 6.04 percent the week
before the policy was announced to a record low 5.10 percent last
week, accomplishing a vitally important step in addressing this
housing correction - lower mortgage rates that may bring additional
credit-worthy buyers into the housing market.
*
Foreclosure Mitigation Efforts
*
While the GSEs are in this temporary form, we have also worked to
increase their impact on foreclosure mitigation. In November, FHFA,
the GSEs, Treasury and the HOPE NOW Alliance announced a major
streamlined loan modification program (SMP) to move struggling
homeowners into affordable mortgages. The new protocol relies heavily
on the "IndyMac model" developed by the FDIC and creates sustainable
monthly mortgage payments by targeting a benchmark ratio of housing
payments to monthly gross income. Together with the IndyMac/FDIC
protocol, the SMP creates a powerful new model that should help ensure
that no borrower who wants to stay in their home and can make a
reasonable monthly payment will fall into foreclosure.
The SMP will directly and immediately apply to the 50 percent of
homeowners with loans serviced under the GSEs' auspices. Fannie and
Freddie announced that they would suspend foreclosure sales and cease
evictions of owner-occupied homes until January 9th to allow time for
implementation of the modification program. The timing of this
initiative is especially important as prime loans now account for
almost 50 percent of new delinquencies, and delinquencies are
increasingly the result of overall economic factors rather than the
loan features and underwriting practices associated with Alt-A and
subprime products.
And the impact of the SMP will go much further. The vast majority of
servicing contracts for non-GSE mortgages reference the GSEs'
practices, and we therefore expect the SMP to be widely adopted and
quickly move hundreds of thousands of struggling borrowers into
sustainable, affordable mortgages. Further, this streamlined protocol
frees up servicing industry resources that can be redirected to
providing case-by-case assistance to more difficult cases that fall
outside the SMP protocol.
*
Impact of Temporary Authorities to Stabilize the GSEs
*
Given the authority granted by Congress last summer, we have gone
about as far as we can to avert systemic risk and to use the GSEs to
speed progress through the housing correction that lies at the heart
of our economic downturn. Although the effective guarantee of GSE debt
and MBS has brought some degree of stabilization, it is not the most
efficient way to remove the ambiguity inherent in the GSE structure,
even temporarily.
To the extent that the Congress and the next Administration wish to
use the GSEs as a tool to further reduce mortgage rates, they could,
under existing authorities, make large purchases of mortgages made at
a target rate of, say, 4 percent - although very large volumes of
Treasury issuances would be required for such a program to be
effective. A targeted program such as one that purchases only new
mortgages made for home purchases, as opposed to refinancing, for a
one year period would require less but still substantial funding.
Separately, the next Administration could pursue legislative authority
to directly guarantee GSE debt for the remainder of the
conservatorship period.
*
Long-Term Policy Recommendations
*
The GSEs are playing a necessary role supporting the mortgage
availability which is essential to eventually turning the corner on
the housing correction, reducing the stress in our capital markets and
returning to growth in our economy. This must continue to be our first
priority. But we will make a grave error if we don't use this period
to decide what role government in general, and these entities in
particular, should play in the housing market.
The public debate over the long-term structure of the GSEs is
dramatically changed today - no one any longer doubts the systemic
risk these entities posed. It is clear to all conservatorship is a
temporary form, and that returning the GSEs to their
pre-conservatorship form is not an option.
The debate about the future of Fannie and Freddie requires answering
the much larger and more important question of the federal
government's role in the mortgage market and in housing policy,
generally. Given the bubble we have experienced, policymakers must ask
what amount of homeownership subsidies are appropriate. Numerous
long-standing indirect subsidies already exist, including the mortgage
interest deduction, subsidized FHA mortgages, and the variety of other
HUD programs that expand homeownership opportunities.
Is that enough? Or should government also reduce mortgage rates for a
larger group of homebuyers? Policymakers must decide if the GSE
subsidy is a public policy priority. If the GSEs are to play a role,
then, the debate is clearly framed: Government support needs to be
either explicit or non-existent, and structured to resolve the
conflict between public and private purposes. Any middle ground is a
recipe for another crisis. Although there are strong differences of
opinion over the government's role in supporting housing, under any
course policymakers choose, there are structures and choices that can
resolve the long-term conflict of purposes issues.
And it is clear that to protect against systemic risk in the future,
the GSEs should be constituted with a portfolio no larger than what is
minimally necessary for warehousing purposes. Without portfolios of
significant size, the enterprises' management of interest rate risk
would remain a vital function for the safety and soundness of the
enterprises, but would no longer present the same potential systemic
risk.
As a public policy tool to expand homeownership, the GSEs, like
FHA-Ginnie Mae, reduce mortgage rates for borrowers by taking on the
credit risk that mortgage investors would otherwise bear and
guaranteeing that mortgage investors will be paid in full should the
mortgage borrower default. As Congress considers the future role and
structure of the GSEs, it must consider how much credit risk the
Federal government should take.
*
Addressing Credit Risk
*
In today's stressed mortgage market, between FHA-Ginnie Mae, Fannie
Mae, and Freddie Mac, almost all new mortgage market originations have
federal government credit support. This is not sustainable over the
long-run. It will lead to inefficiency, less innovation and higher
costs. It also contradicts basic U.S. market principles. We must have
some degree of private sector involvement in the evaluation of credit
risk if we are going to have a mortgage market that allocates
resources with efficiency.
In the mortgage market of the future, I clearly see a role for the FHA
and Ginnie Mae for first-time and low income homebuyers. Beyond the
explicit guarantee provided to FHA and Ginnie Mae policymakers must
decide how much to further subsidize mortgage credit risk, if at all,
and must decide the role of private capital in any subsidy plan.
Depending on the degree of subsidy policymakers choose, there are a
variety of options for structures to replace the GSEs, including:
"
(1) Expanded FHA/Ginnie Mae." Some advocate that beyond the current
credit crisis the U.S. government's long-term policy should make the
implicit, explicit. Explicitly guaranteeing Fannie and Freddie's
obligations would essentially nationalize this significant portion of
the U.S. housing finance market. Under this model, the GSEs could
become a government entity, or their functions could be absorbed by
FHA/Ginnie Mae . In either case, the GSEs would no longer have private
shareholders. The size of the eligible population of homebuyers would
determine how large a share of mortgage credit exposure the government
would own.
I view the permanent nationalization of the GSEs, essentially
expanding the role of FHA and Ginnie Mae, as a less-than optimal
model. While it offers the perceived advantage of explicit government
support, it eliminates the necessary private sector evaluations of
credit risk and the private market stimulus to innovation.
"
(2) Partial Guarantee." A hybrid of this would be to create a Ginnie
Mae-like entity for non-FHA mortgages, structured as a partial
guarantee mechanism. The new entity could operate on a similar basis
as Ginnie Mae, but provide only partial guarantees for MBS. Investors
would then have a floor under potential MBS losses, but would still
evaluate the credit risk associated with individual issuers. While
such a hybrid program would clearly define the extent of the
government's guarantee, developing risk sharing parameters compatible
with profit incentives would be as problematic, and potentially as
inefficient, as in the current GSE structure.
"
(3) Privatization." A third alternative would be to remove all direct
or indirect government support, completely privatizing these companies
while breaking them up to minimize systemic risk. As appealing as this
alternative sounds, it is difficult to envision a sound, practical,
private sector mortgage insurance business of any significant size
that does not require large amounts of capital, and consequently
generates only a modest return on capital. The recent problems
encountered by monoline insurers, which ventured into guaranteeing
mortgage product as well as the experience of the GSEs, underscores
this point. Moreover, a break up scenario does not look particularly
promising, as reverse economies of scale would take hold. It is also
worth noting that a regional mortgage insurer would lack diversity as
a risk mitigant. Perhaps a consortium of banks would find it
advantageous to own a national mortgage insurer to wrap their product,
or some other good private sector business model may emerge. But I am
skeptical that the "break it up and privatize it" option will prove to
be a robust or even viable model of any substantial scale, without
some sort of government support or protection. However, should
policymakers choose to scale back public policy bias toward
homeownership, we will eventually find out what business model the
free market would support.
"
(4) Housing Utility." Finally, given traditional U.S. public policy
support for marshalling private capital to expand homeownership,
establishing a public utility-like mortgage credit guarantor could be
the best way to resolve the inherent conflict between public purpose
and private gain. Under a utility model, Congress would replace Fannie
Mae and Freddie Mac with one or two private sector entities. The
entities would purchase and securitize mortgages with a credit
guarantee backed by the federal government, and would not have
investment portfolios. These entities would be privately-owned, but
governed by a rate setting commission that would establish a targeted
rate of return, thereby addressing the inherent conflicts between
private ownership and public purpose that are unresolved in the
current GSE structure. This commission would also approve mortgage
product and underwriting innovations to continually improve the
availability of mortgage finance for a population to be defined by the
Congress. In this model, continued safety and soundness regulation
would be essential.
*
Need to Support Vibrant Private Market
*
If we are to maintain a private-sector secondary mortgage market -
which I believe serves the taxpayer and the homebuyer equally well -
then we must enhance the ability of depository institutions to fund
mortgages, either as competitors to a newly-established government
structure or as a substitute for government funding. One way to do
this is for the government to receive some compensation for its
guarantee. The current GSE Preferred Stock Purchase Agreements take a
small step in this direction, in that as of 2010 the GSEs must pay the
government a fee for the taxpayer backstop on their guarantees. Of
course, if this rate perfectly reflected the risk versus the cost of
the guarantee, there would be no subsidy to mortgage availability. It
is obviously inherently difficult to reach an exactly correct price,
yet a long-term fee-like structure in exchange for explicit government
backing would help to reduce advantages over private institutions.
Over time, another approach might be to offer other financial
institutions the opportunity to pay a fee for government backing on
securitized, conforming loans, a structural transformation that would
lower entry barriers, and increase competition and innovation in
housing finance.
Covered bonds are another private sector alternative worth exploring.
The FDIC has made regulatory changes to support the emergence of
covered bonds, which could provide enhanced opportunities for
depository institutions to fund and manage mortgage credit risk. There
is strong interest in developing a U.S. covered bond market, but we
will have to work through the credit crisis before a new market is
likely to take hold. Some have advocated dedicated covered bond
legislation, which could be helpful to establishing this market, and
should be considered in the context of broader housing finance
reforms.
Additionally, the President's Working Group on Financial Markets has
recommended extensive reforms in the mortgage securitization process
by investors, ratings agencies, underwriters and regulators,
especially with respect to mortgage origination oversight. When these
reforms are in place, we expect private label securitization to return
with greater oversight and market discipline.
*
Conclusion
*
My thoughts today are intended to inform the necessary debate over the
future structure of the housing GSEs. By allowing the GSE structural
ambiguities to persist for too long, U.S. policymakers have created an
untenable situation. Today, Fannie Mae and Freddie Mac are in a
temporary form that, while stable, cannot efficiently serve their
Congressionally-chartered mission and protect the taxpayers'
investment over the long-term. We took the right actions to meet a
specific need at a specific time.
The GSEs are critical to getting us through this current period, and
this is our first priority. More may need to be done to clarify and
simplify their structure and to increase their effectiveness in
curbing further housing price correction. But we cannot look only at
this short-term need; policymakers must resolve the question of
long-term structure because the pre-conservatorship model has been
disproven.
The first step must be for policymakers to decide - in light of the
recent housing bubble and the severe financial and economic penalty it
has imposed on our nation - the role government should play in
supporting home ownership. We cannot allow a repeat of the devastation
this housing correction has wreaked on families and communities across
the United States. Once that decision is made, the GSEs should be
restructured to meet that public policy choice and satisfy three
objectives: First, there must be no ambiguity as to government
backing. It must be explicit or non-existent. Second, there must be a
clear means of managing the conflict between public support and
private profit. Third, there must be strong regulatory oversight of
the resulting institutions.
As I have outlined, whatever role the U.S. government chooses to play
in subsidizing mortgage finance, there is a structure that can meet
the objectives. With the knowledge of recent experience, we have a
responsibility to begin work now on a long-term GSE structure which
avoids the dangerous mix of policy and market distortions created by
the former flawed GSE model. Thank you.
*
-30-
*
Message: 21 From: U.S. Department of the Treasury
<subscriptions@subscriptions.treas.gov> Date: Thu, 8 Jan 2009 09:03:38
-0600 (CST) Subject: U.S. Department of the Treasury OIG's Audit
Reports Update
You are subscribed to OIG's Audit Reports for U.S. Department of the
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Message: 22 From: U.S. Department of the Treasury
<subscriptions@subscriptions.treas.gov> Date: Thu, 8 Jan 2009 09:20:13
-0600 (CST) Subject: Treasury Releases Fourth Tranche Report
Treasury Releases Fourth Tranche Report [
http://www.treas.gov/press/releases/hp1346.htm ]
January 8, 2009
HP-1346
*Treasury Releases Fourth Tranche Report*
*
Washington, DC -* The Treasury Department today released the fourth
Tranche Report to Congress, as required by section 105(b) of the
Emergency Economic Stabilization Act. All Tranche Reports can be found
at: _http://www.treasury.gov/initiatives/eesa/tranche-reports.shtml_ [
http://www.treasury.gov/initiatives/eesa/tranche-reports.shtml ].
*-30-
*
Message: 23 From: U.S. Department of the Treasury
<subscriptions@subscriptions.treas.gov> Date: Thu, 8 Jan 2009 12:40:12
-0600 (CST) Subject: Asst Sec Kashkari Remarks at Brookings
Institution
Asst Sec Kashkari Remarks at Brookings Institution [
http://www.treas.gov/press/releases/hp1347.htm ]
January 8, 2009
HP-1347
*Interim Assistant Secretary for Financial Stability
Neel Kashkari Remarks at Brookings Institution*
*
Washington - *Good afternoon. Thank you, Martin, for that kind
introduction I would also like to thank the Brookings Institution for
hosting us today I will provide a comprehensive update on the Treasury
Department's progress in implementing the Troubled Asset Relief
Program (TARP), and then spend some time taking questions from the
audience and having a discussion.
We are in an unprecedented period and market events are moving rapidly
and unpredictably. We at Treasury have responded quickly to adapt to
events on the ground. Throughout the crisis, we have always acted with
the following critical objectives in mind: one, to stabilize financial
markets and reduce systemic risk; two, to support the housing market
by avoiding preventable foreclosures and supporting mortgage finance;
and three, to protect taxpayers. The authorities and flexibility
granted to us by Congress have been essential to developing the
programs necessary to meet these objectives.
A program as large and complex as the TARP would normally take many
months or years to establish. But, we did not have the luxury of first
building the operation, then designing our programs and then executing
them. Given the severity of the financial crisis, we had to build the
Office of Financial Stability, design our programs, and execute them -
all at the same time. We have made remarkable progress since the
President signed the law only 97 days ago.
Today, I will brief you about five areas. First, I will give an update
on execution of the programs Treasury has implemented under the TARP.
Second, I will review the progress we've made in building the Office
of Financial Stability. Third, I will provide an update on our efforts
to meet the highest standards for compliance and oversight. Fourth, I
will review the thorough reporting requirements we continue to meet.
Finally, I will update you on some of the measurements we look at to
judge if our programs are working.
*
Update on TARP Programs
*
I will begin with the Capital Purchase Program (CPP). On October 14,
Secretary Paulson announced that we would allocate $250 billion of the
financial rescue package for a voluntary capital purchase program for
healthy, viable banks of all sizes. The CPP was designed to first
stabilize the financial system by increasing the capital in our banks,
and then to restore confidence so credit could flow to our consumers
and businesses.
People often ask: why are we investing in healthy banks? Shouldn't the
TARP be used for failing banks? Healthy banks are in the best position
to support their communities by extending credit. A dollar invested in
a healthy bank is far more likely to be used to promote lending to
creditworthy borrowers than a dollar invested in a failing bank, which
would more likely use it to stay afloat.
It has been 86 days since Secretary Paulson announced the Capital
Purchase Program. We started from scratch, recruited and built a world
class team, designed the program details, hired necessary outside
vendors, and implemented a complex, but efficient processing model. In
that time, we have invested $178 billion in 214 institutions in 41
states across the country, as well as Puerto Rico.
There is a huge demand for the program: the number of applications
under-review at the regulators is in the thousands, representing every
state in the country, and hundreds more have already been pre-approved
by Treasury. We are pleased with the large number of banks that have
applied. The regulators are working diligently to get through their
review and forward recommended applications to us as quickly as they
can. We expect their review to continue over the next few months.
We continue to process applications quickly but carefully to ensure
our program guidelines and goals are met. Our investment committee
meets virtually every day to review applications as soon as they are
sent to us by the regulators and we close transactions often within
days of approval. In fact, we find that institutions need more time
to complete their legal requirements than Treasury needs to execute
the investments.
Our work will not let up until the last application has been reviewed
and processed. Completing investments in more than 200 institutions
across the nation in less than 90 days is a feat that I believe is
unmatched in the public or private sectors. This progress is
remarkable not only in its speed and quality, but also in its scope.
We have reviewed applications from every state in the nation and
touched almost every banking market with applications from small and
large banks alike, including Community Development Financial
Institutions. The largest investment under the CPP has been $25
billion and the smallest less than $2 million, with applications for
upcoming investments of a few hundred thousand dollars.
*
Automotive Industry Financing Program
*
Next, I will discuss Treasury's actions under TARP to support the auto
sector. While the TARP was designed to stabilize the financial sector,
the legislation provided sufficiently broad authority to act to
stabilize the domestic automotive industry. Absent congressional
action, no other authority existed within the federal government to
stave off a disorderly bankruptcy of one or more auto companies.
Treasury was forced to act to prevent a significant disruption of the
automotive industry that would pose a systemic risk to financial
markets and negatively affect the real economy.
Last week, Treasury began funding transactions under this program. We
funded our full commitment of a $4 billion loan to Chrysler, and we
funded the first $4 billion of a $13.4 billion commitment to GM - the
last $4 billion of which depends on future congressional action. The
terms of these loans require the companies to move quickly to develop
plans demonstrating long-term viability, and they also include
significant taxpayer protection provisions.
Because the finance companies serve as the lifeblood of the
automakers, we knew that our program would need to address the
short-term needs of the auto finance companies as well. Last week, we
funded a $5 billion investment in GMAC. We also committed to an
additional $1 billion loan to GM to be used to participate in a rights
offering at GMAC as part of its recapitalization in becoming a bank
holding company.
These financings were designed to use our limited remaining resources
to address the participating companies' short-term needs while
providing them enough time to begin the hard work with all
stakeholders that will be necessary to achieve viability.
*
Term Asset-Backed Securities Lending Facility
*
Support of the consumer finance sector is a high priority for Treasury
because of its fundamental role in fueling economic growth. Like other
forms of credit, affordable consumer credit depends on ready access to
a liquid and affordable secondary market - in this case, the
asset-backed credit market
The Federal Reserve is setting-up a $200 billion program to support
consumer finance securitization markets, specifically credit cards,
auto loans, student loans and small business loans. Under the TARP,
Treasury will provide $20 billion in this facility, which will enable
a broad range of institutions to step up their lending and enable
borrowers to have access to lower-cost consumer finance and small
business loans. The facility may be expanded over time and eligible
asset classes may be expanded later to include other assets, such as
commercial mortgage-backed securities, non-agency residential
mortgage-backed securities or other asset classes. Treasury and the
Federal Reserve continue to make progress in establishing this
facility, which we expect to become operational in February.
*
Asset Guarantee Program
*
We established the Asset Guarantee Program under section 102 of the
EESA. This program provides guarantees for assets held by systemically
significant financial institutions that face a risk of losing market
confidence due in large part to a portfolio of distressed or illiquid
assets. Treasury is exploring use of this program to address the $5
billion guarantee provisions of our recent agreement with Citigroup.
*
Targeted Investment Program
*
As part of our recent $20 billion investment in Citigroup, Treasury
also established the Targeted Investment Program, the objective of
which is to foster financial market stability. In an environment of
high volatility and severe financial market strains, the loss of
confidence in a major financial institution could result in
significant market disruptions that threaten the financial strength of
similar institutions. This investment in Citigroup includes important
restrictions on executive compensation and corporate expenses as well
as provisions to protect the taxpayers.
*
Building the Office of Financial Stability
*
Let me now turn to our work to establish the Office of Financial
Stability. I mentioned that a program as large and complex as the TARP
would normally take many months or years to establish. Given the
severity of the financial crisis, we had to build the Office of
Financial Stability, design our programs, and execute them - all at
the same time.
Recruiting excellent people was the first and most important part of
successfully establishing the office. We started by tapping the very
best, seasoned, financial veterans from across the government and
private sector to help launch the program. We were successful in
quickly recruiting outstanding interim leaders for key positions in
the office. In each case, the interim official was charged with: one,
setting up the office; two, hiring permanent staff; three,
operationalizing our programs; and, four, identifying their permanent
successor. That process has worked extremely well.
Today we have almost 90 dedicated TARP staff, including full-time
employees we have hired since the law was signed and experienced
detailees we have recruited from across the government. In many cases,
those detailees are choosing to become permanent members of the TARP
team. This does not include the numerous main Treasury employees who
are spending most of their time on TARP. We also have a robust
pipeline of outstanding new people joining the team each week.
We have worked very hard to ensure the transition to the next
Administration is smooth. The only political position within in the
TARP is the Assistant Secretary position. Almost all of the remaining
positions are being filled by people who are planning to remain with
the program after the transition. The next Administration will inherit
an Office of Financial Stability that is fully-staffed and executing
extremely well. We have worked very hard to make sure there would be
continuity so the program does not slow down. As I previously
mentioned, we have many applications to process for the CPP over the
next several months. We have made sure the team is in place to see
that work through. We have also worked closely with the GSA to acquire
dedicated space for the entire team. We moved in this past Monday and
we expect the Special Inspector General will move to the same space in
the next few weeks.
**
For a sense of the execution challenges this team has already
successfully faced, consider that last week alone, our team closed $48
billion of transactions. We signed and funded over $15 billion in our
Capital Purchase Program, a $20 billion investment in Citigroup, and a
total of $13 billion to GMAC, GM and Chrysler.
*
Compliance and Oversight
*
I will now turn to oversight. Congressional committees of jurisdiction
are the traditional bodies of oversight and Treasury has participated
in five Congressional hearings on the TARP since the EESA was passed.
In addition, the Congress established four additional avenues of
oversight: one, the Financial Stability Oversight Board; two, the
Special Inspector General; three, the Government Accountability
Office; and four, the Congressional Oversight Panel. I will briefly
review Treasury's interaction with each body.
First, we moved immediately to establish the Financial Stability
Oversight Board, which is chaired by Federal Reserve Chairman
Bernanke. The law requires the Board to meet once a month, but it has
met multiple times since the law was signed, with numerous staff calls
between meetings. We have also posted the bylaws and minutes of the
Board meetings on Treasury's website.
Second, the law also requires appointment of a Senate-confirmed
Special Inspector General to oversee the program. We welcome the
Senate's confirmation of Neil Barofsky as the Special Inspector
General. I meet weekly with the Inspector General and our staffs meet
regularly.
Third, the law calls for the Government Accountability Office to
establish a physical presence at Treasury to monitor the program.
Treasury provided workspace for our auditors within days of the
President signing the law. I have participated in multiple briefings
with the GAO and our respective staffs are meeting almost daily for
program updates and to review contracts.
Finally, the law called for the establishment of a Congressional
Oversight Panel to review the TARP. That Oversight Panel was recently
formed and we had our first meeting on Friday, November 21 and our
second meeting on Thursday, December 18. The Congressional Oversight
Panel posed a number of questions to Treasury and we provided a detail
response which we published on our website on December 31.
*
Reporting and Transparency
*
Next, I will discuss reporting requirements and transparency.
Reporting results to Congress and the American people is a critical
responsibility of the TARP. People need to see what we are doing,
understand why we are doing it, and know the effects of our actions.
The law defined numerous reporting requirements for the TARP, which I
will briefly review here. Treasury has met all of our reporting
requirements on time, and will continue to do so. All of our reports
are posted on the Treasury website.
* First, the law requires Treasury to publish a Transaction Report
within two business days of completing each TARP transaction. We have
published eleven transaction reports so far.
* Second, the law requires Treasury to publish a Tranche Report to
Congress within seven days of each $50 billion commitment that is
made. To date, Treasury has published four Tranche Reports, including
one this week.
* Finally, the law requires Treasury to provide a detailed report on
the overall program within 60 days of the first exercise of the TARP
purchase authority and then monthly thereafter. We have published two
such reports so far, the most recent this week.
*
Measuring Results
*
Finally, I will address the important issue of measuring the results
of our programs. People often ask: how do we know our programs are
working? The most important evidence that our strategy is working is
that we have stemmed a series of financial institution failures. The
financial system is fundamentally more stable than it was when
Congress passed the legislation. While it is difficult to isolate one
program's effects given policymakers' numerous actions, one indicator
that points to reduced risk of default among financial institutions is
the average credit default swap spread for the eight largest U.S.
banks, which has declined by about 275 basis points since before
Congress passed the EESA. Another key indicator of perceived risk is
the spread between LIBOR and OIS: 1-month and 3-month LIBOR-OIS
spreads have declined about 202 and 147 basis points, respectively,
since the law was signed and about 312 and 242 basis points,
respectively, from their peak levels before the CPP was announced.
People also ask: when will we see banks making new loans? It is
important to note that almost $75 of the $250 billion CPP has yet to
be received by the banks. Treasury is executing at a rapid speed, but
it will take some time to review and fund all the remaining
applications. This capital needs to get into the system before it can
have the desired effect. In addition, we are still at a point of low
confidence - both due to the financial crisis and the economic
downturn. As long as confidence remains low, banks will remain
cautious about extending credit, and consumers and businesses will
remain cautious about taking on new loans. As confidence returns,
Treasury expects to see more credit extended.
People have then asked: how will you track lending activity? Treasury
has been working with the banking regulators to design a program to
measure the lending activities of banks that have received TARP
capital. We plan to use quarterly call report data to study changes in
the balance sheets and intermediation activities of institutions we
have invested in and compare their activities to a comparable set of
institutions that have not received TARP capital investments. Because
call report data is infrequent, we also plan to augment that analysis
with a selection of data we plan to collect monthly from the largest
banks we have invested in for a more frequent snapshot.
The increased lending that is vital to our economy will not
materialize as fast as any of us would like, but it will happen much
faster as a result of deploying resources from the TARP to stabilize
the system and increase capital in our banks.
*
Conclusions
*
While we have made significant progress, we recognize challenges lie
ahead. As Secretary Paulson has said, there is no single action the
federal government can take to end the financial market turmoil and
the economic downturn, but the authorities Congress provided last fall
dramatically expanded the tools available to address the needs of our
system. We are confident that we are pursuing the right strategy to
stabilize the financial system and support the flow of credit to our
economy. We have worked around the clock to build the Office of
Financial Stability, design our programs, and execute them and will
hand the next Administration a program that is staffed and fully
operational. Thank you and I would be happy to take your questions.
*
-30-
*
Message: 24 From: U.S. Department of the Treasury
<subscriptions@subscriptions.treas.gov> Date: Fri, 9 Jan 2009 13:01:38
-0600 (CST) Subject: U.S. International Reserve Position
U.S. International Reserve Position [
http://www.treas.gov/press/releases/20091913424512516.htm ]
January 9, 2009
2009-1-9-13-42-45-12516
*U.S. International Reserve Position*
The Treasury Department today released U.S. reserve assets data for
the latest week. As indicated in this table, U.S. reserve assets
totaled $78,006 million as of the end of that week, compared to
$78,334 million as of the end of the prior week.
I. Official reserve assets and other foreign currency assets
(approximate market value, in US millions)
January 2, 2009
A. Official reserve assets (in US millions unless otherwise specified) 1
Euro
Yen
Total
(1) Foreign currency reserves (in convertible foreign currencies)
78,006
(a) Securities
9,565
14,187
23,752
of which: issuer headquartered in reporting country but located abroad
0
(b) total currency and deposits with:
(i) other national central banks, BIS and IMF
11,125
6,941
18,066
ii) banks headquartered in the reporting country
0
of which: located abroad
0
(iii) banks headquartered outside the reporting country
0
of which: located in the reporting country
0
(2) IMF reserve position 2
7,662
(3) SDRs 2
9,315
(4) gold (including gold deposits and, if appropriate, gold swapped) 3
11,041
--volume in millions of fine troy ounces
261.499
(5) other reserve assets (specify)
8,169
--financial derivatives
--loans to nonbank nonresidents
--other (foreign currency assets invested through reverse repurchase agreements)
8,169
B. Other foreign currency assets (specify)
--securities not included in official reserve assets
--deposits not included in official reserve assets
--loans not included in official reserve assets
--financial derivatives not included in official reserve assets
--gold not included in official reserve assets
--other
II. Predetermined short-term net drains on foreign currency assets
(nominal value)
Maturity breakdown (residual maturity)
Total
Up to 1 month
More than 1 and up to 3 months
More than 3 months and up to 1 year
1. Foreign currency loans, securities, and deposits
--outflows (-)
Principal
Interest
--inflows (+)
Principal
Interest
2. Aggregate short and long positions in forwards and futures in
foreign currencies vis-a-vis the domestic currency (including the
forward leg of currency swaps)
(a) Short positions ( - ) 4
-544,474
-393,779
-150,695
(b) Long positions (+)
3. Other (specify)
--outflows related to repos (-)
--inflows related to reverse repos (+)
--trade credit (-)
--trade credit (+)
--other accounts payable (-)
--other accounts receivable (+)
III. Contingent short-term net drains on foreign currency assets (nominal value)
Maturity breakdown (residual maturity, where applicable)
Total
Up to 1 month
More than 1 and up to 3 months
More than 3 months and up to 1 year
1. Contingent liabilities in foreign currency
(a) Collateral guarantees on debt falling due within 1 year
(b) Other contingent liabilities
2. Foreign currency securities issued with embedded options (puttable bonds)
3. Undrawn, unconditional credit lines provided by:
(a) other national monetary authorities, BIS, IMF, and other
international organizations
--other national monetary authorities (+)
--BIS (+)
--IMF (+)
(b) with banks and other financial institutions headquartered in the
reporting country (+)
(c) with banks and other financial institutions headquartered outside
the reporting country (+)
Undrawn, unconditional credit lines provided to:
(a) other national monetary authorities, BIS, IMF, and other
international organizations
--other national monetary authorities (-)
--BIS (-)
--IMF (-)
(b) banks and other financial institutions headquartered in reporting
country (- )
(c) banks and other financial institutions headquartered outside the
reporting country ( - )
4. Aggregate short and long positions of options in foreign currencies
vis-a-vis the domestic currency
(a) Short positions
(i) Bought puts
(ii) Written calls
(b) Long positions
(i) Bought calls
(ii) Written puts
PRO MEMORIA: In-the-money options 11 [
http://www.imf.org/external/np/sta/ir/usa/eng/curusa.htm#11 ]
(1) At current exchange rate
(a) Short position
(b) Long position
(2) + 5 % (depreciation of 5%)
(a) Short position
(b) Long position
(3) - 5 % (appreciation of 5%)
(a) Short position
(b) Long position
(4) +10 % (depreciation of 10%)
(a) Short position
(b) Long position
(5) - 10 % (appreciation of 10%)
(a) Short position
(b) Long position
(6) Other (specify)
(a) Short position
(b) Long position
IV. Memo items
(1) To be reported with standard periodicity and timeliness: [
http://www.imf.org/external/np/sta/ir/usa/eng/curusa.htm#12 ]
(a) short-term domestic currency debt indexed to the exchange rate
(b) financial instruments denominated in foreign currency and settled
by other means (e.g., in domestic currency) [
http://www.imf.org/external/np/sta/ir/usa/eng/curusa.htm#13 ]
--nondeliverable forwards
--short positions
--long positions
--other instruments
(c) pledged assets [
http://www.imf.org/external/np/sta/ir/usa/eng/curusa.htm#14 ]
--included in reserve assets
--included in other foreign currency assets
(d) securities lent and on repo [
http://www.imf.org/external/np/sta/ir/usa/eng/curusa.htm#15 ]
8,335
--lent or repoed and included in Section I
--lent or repoed but not included in Section I
--borrowed or acquired and included in Section I
--borrowed or acquired but not included in Section I
8,335
(e) financial derivative assets (net, marked to market)
--forwards
--futures
--swaps
--options
--other
(f) derivatives (forward, futures, or options contracts) that have a
residual maturity greater than one year, which are subject to margin
calls.
--aggregate short and long positions in forwards and futures in
foreign currencies vis-a-vis the domestic currency (including the
forward leg of currency swaps)
(a) short positions ( - )
(b) long positions (+)
--aggregate short and long positions of options in foreign currencies
vis-a-vis the domestic currency
(a) short positions
(i) bought puts
(ii) written calls
(b) long positions
(i) bought calls
(ii) written puts
(2) To be disclosed less frequently:
(a) currency composition of reserves (by groups of currencies)
78,006
--currencies in SDR basket
78,006
2--currencies not in SDR basket
--by individual currencies (optional)
*Notes:*
1/ Includes holdings of the Treasury's Exchange Stabilization Fund
(ESF) and the Federal Reserve's System Open Market Account (SOMA),
valued at current market exchange rates. Foreign currency holdings
listed as securities reflect marked-to-market values, and deposits
reflect carrying values.
2/ The items, "2. IMF Reserve Position" and "3. Special Drawing Rights
(SDRs)," are based on data provided by the IMF and are valued in
dollar terms at the official SDR/dollar exchange rate for the
reporting date. The entries for the latest week reflect any necessary
adjustments, including revaluation, by the U.S. Treasury to IMF data
for the prior month end.
3/ Gold stock is valued monthly at $42.2222 per fine troy ounce.
4/ The short positions reflect foreign exchange acquired under
reciprocal currency arrangements with certain foreign central banks.
The foreign exchange acquired is not included in Section I, "official
reserve assets and other foreign currency assets," of the template for
reporting international reserves. However, it is included in the
broader balance of payments presentation as "U.S. Government assets,
other than official reserve assets/U.S. foreign currency holdings and
U.S. short-term assets."
Message: 25 From: U.S. Department of the Treasury
<subscriptions@subscriptions.treas.gov> Date: Fri, 9 Jan 2009 13:40:08
-0600 (CST) Subject: Treasury Department Public Engagements Schedule
Treasury Department Public Engagements Schedule [
http://www.treas.gov/press/schedule.html ]
January 9, 2009
PublicSchedule
*Public Schedule*
*FOR THE WEEK OF JANUARY 10- JANUARY 16*
*Monday, January 12, 2009, 2:00 p.m. EST
*Secretary Henry M. Paulson, Jr.
Remarks on How Markets Can Help Address Climate Change and Other
Environmental Problems
Resources for the Future
Conference Center
1616 P Street, NW
Washington, D.C.
Note: All media must pre-register with Stan Wellborn at (202) 328-5026
or wellborn@rff.org.
*Tuesday, January 13, 2009, 9:30 a.m. EST
*Interim Assistant Secretary for Financial Stability Neel Kashkari
Update on TARP Implementation
McDonough School of Business
Georgetown University
3520 Prospect Street, Room 202
Washington, D.C.
Note: Press should RSVP to Chris Kormis at 202-687-4233 or cmk68@georgetownedu.
*Wednesday, January 14, 2009, 10:00 a.m. EST
*Deputy Assistant Secretary for Financial Education Dan Iannicola, Jr.
Remarks on How to Educate Couples about Money
Relationship Finance Summit
Treasury Department
Media Room (4121)
1500 Pennsylvania Avenue, NW
Washington, D.C.
Note: Media without Treasury press credentials should contact Frances
Anderson at (202) 622-2960, or Frances.Anderson@do.treas.gov with the
following information: full name, Social Security number, and date of
birth.
*Thursday, January 15, 2009, 10:00 a.m. EST
*Deputy Assistant Secretary for Financial Education Dan Iannicola, Jr.
Financial Literacy and Education Commission Meeting
Treasury Department
Cash Room
1500 Pennsylvania Avenue, NW
Washington, D.C.
Note: Media without Treasury press credentials should contact Frances
Anderson at (202) 622-2960, or Frances.Anderson@do.treas.gov with the
following information: full name, Social Security number, and date of
birth.
*Thursday, January 15, 2009, 2:30 p.m. EST
*Meeting of the Advisory Committee on Energy and Environment
Cooperation with China
Treasury Department
Media Room (4121)
1500 Pennsylvania Avenue, NW
Washington, D.C.
Note: Media without Treasury press credentials should contact Frances
Anderson at (202) 622-2960, or Frances.Anderson@do.treas.gov with the
following information: full name, Social Security number, and date of
birth.
*-30-
*
Message: 26 From: U.S. Department of the Treasury
<subscriptions@subscriptions.treas.gov> Date: Fri, 9 Jan 2009 14:03:46
-0600 (CST) Subject: Treasury Releases Sixth in A Series of Social
Security Papers
Treasury Releases Sixth in A Series of Social Security Papers [
http://www.treas.gov/press/releases/hp1348.htm ]
"To view or print the PDF content on this page, download the free
Adobe(R) Acrobat(R) Reader(R) [
http://www.adobe.com/products/acrobat/readstep.html ]."
January 9, 2009
HP-1348
*Treasury Releases Sixth in a Series of Social Security Papers*
*Washington, DC** *- Treasury today released the sixth and final in a
series of papers on Social Security. Issue Brief No. 6 is entitled
Social Security Reform: Work Incentives.
*REPORTS*
* Social Security Reform: Work Incentives [
http://www.treas.gov/press/releases/reports/treasury ss issue brief no
6.pdf ]
Message: 27 From: U.S. Department of the Treasury
<subscriptions@subscriptions.treas.gov> Date: Tue, 13 Jan 2009
08:40:46 -0600 (CST) Subject: Interim Asst Sec Kashkari Review of
Financial Markets Crisis and TARP
Interim Asst Sec Kashkari Review of Financial Markets Crisis and TARP
[ http://www.treas.gov/press/releases/hp1349.htm ]
January 13, 2009
HP-1349
*Interim Assistant Secretary for Financial Stability Neel Kashkari
Review of the Financial Market Crisis and the Troubled Assets Relief
Program*
*Washington* - Good morning. Thank you, Dean Daly, for that kind
introduction. I would also like to thank the McDonough School of
Business at Georgetown for hosting us today.
Today, I will provide a review of the financial market crisis and
Treasury's strategy to implement the Troubled Assets Relief Program
(TARP) to promote financial stability. First, I will briefly explain
why the Administration took the unprecedented action to request
Congressional approval for a $700 billion program to support the
financial system. Second, I will explain why- as a first step- we
decided to invest in healthy banks through purchases of capital,
rather than buying illiquid assets. Third, I will discuss how the
capital is being used by recipient banks. Finally, I look forward to
answering your questions.
Before I begin, I will give you a brief update on the latest
statistics of the Capital Purchase Program, a program to invest in
healthy banks of all sizes. On Friday, we executed 43 investments,
bringing our total investment to $189 billion in 257 banks in 42
states and Puerto Rico. The largest investment was $25 billion and the
smallest investment $1 million. In addition, after extensive
preparation, we have also completed a term sheet for S-corps to
participate in this program. The S-corp term sheet will be posted on
the Treasury website tomorrow. The application period will open at
that time and will remain open for 30 days.
*The Importance of the Financial System*
Let me begin by reviewing how the financial system affects Americans
and their families. Banks serve as the primary intermediary between
borrowers and savers. Americans save for their futures and their
families. These savings of individual Americans are combined and made
available to other people and businesses who need to borrow money for
their specific needs. The financial system links millions of savers
around the country with millions borrowers around the country through
billions of individual transactions. This extraordinarily complex, but
usually efficient system includes both banks, where people have their
savings accounts, and other financial institutions that provide, for
example, car loans and student loan financing. This system has
developed over our Nation's history and it is built on confidence and
on trust. Savers - be they individuals or businesses - must have
confidence in the people and institutions they entrust with their
money. And because no single bank can touch every family or every
business, banks must have confidence to lend to each other for the
system to work. If the financial system were to collapse, families
might not be able to access the money they have saved. The economic
implications of a financial system collapse are profound - for every
single American.
*Causes of the Credit Crisis*
With that background, let me briefly describe the fundamental causes
of the credit crisis. The seeds of the credit crisis were planted
during a decade of benign economic conditions, including low interest
rates and low inflation. Financial innovation, which has served the
U.S. economy well over the years, also accelerated. Investors gained
increasing confidence in the effectiveness of new financial products
to diversify and distribute risks. With this perceived reduction in
risk, leverage increased across the financial system. Underwriting
standards for mortgages weakened as more and more reliance was placed
on the value of the collateral (the home) rather than the willingness
and ability of the borrower to repay the loan out of income.
Homeowners took out ever larger mortgages with little or no down
payment and little or no documentation of income. Regulators,
investors and homeowners took comfort from the belief that home prices
only go up.
As we have learned, that belief was incorrect. To understand the
consequence of that miscalculation, consider that the residential
mortgage market in the United States is an $11 trillion market. With
banks' highly leveraged balance sheets and minimal down payments on
home loans, even a minor drop in home prices and rise in defaults can
result in a large hit to banks' capital. Large losses can threaten the
solvency of financial institutions.
Rooted in housing, this credit crisis is complicated by a number of
related factors: First, home prices adjust downward slowly, in part
due to homeowners' reluctance to realize losses; most people would
rather keep their home than sell for a loss if they can avoid it since
it usually is their largest financial asset. Next, this necessary
housing correction, which is not over, is setting the pace of the
credit crisis. Finally, this slow adjustment makes it difficult to
value mortgages and mortgage-backed securities, because investors
don't know for sure where the bottom of the housing market is and when
it will be reached.
But investors are forward looking. With the high leverage in our
financial system, the large and necessary housing correction, and
credit problems arising in other sectors of the economy, investors
quickly realized that the financial system had insufficient capital to
withstand the expected losses. But the opacity of mortgage-backed
securities and the difficulty in valuing mortgage assets meant it was
hard for investors to determine exactly which institutions were at
greatest risk.
Not wanting to be exposed to a failing institution, but also not being
able to determine for certain which institutions were at risk,
investors pulled back wherever they could.
A capital problem for some institutions led to a liquidity problem for
all institutions. That liquidity problem created a serious risk that
our financial system as a whole, both in the U.S. and abroad, could
fail.
Secretary Paulson and Chairman Bernanke recognized early that there
might come a time when the private markets would become unwilling to
provide the necessary capital to our financial system to deal with the
large losses from the housing correction. In such a scenario, only the
Federal government would be in a position to support the financial
system - to step in to provide the needed capital to prevent a
collapse. Government intervention was not our first choice, as it
often has unintended, far-reaching consequences. But it was a
necessary choice.
Capital is essential for a healthy financial system; it permits banks
to take risks and absorb losses while honoring their obligations to
depositors and other creditors. During an economic downturn, many
businesses and consumers want to see extra capital in their bank in
order to have confidence the bank is sound and their money safe.
Similarly, in such times, many banks want to see increased capital in
other banks in order to have confidence to do business with them.
Although government leaders have numerous tools to combat financial
market crises, there was no existing tool to provide capital to the
financial system. In early 2008, we evaluated numerous policy
alternatives and focused on a program to strengthen banks' balance
sheets by purchasing illiquid mortgage assets in very large scale. By
ridding their balance sheets of hard to value and troubled assets,
banks would be better able to attract the private capital needed to
recapitalize our system. We all hoped such government intervention
would not become necessary, but recognized the possibility and began
contingency planning.
In late summer, after the failure of Bear Stearns, the crisis
intensified and our financial institutions came under even more
pressure from deteriorating market conditions and the loss of
confidence. In a very short period of time, some of our largest
financial institutions failed. In July, IndyMac failed. In the month
of September alone, we witnessed the conservatorship of Fannie Mae and
Freddie Mac, the bankruptcy of Lehman Brothers, the rescue of AIG by
the Fed, the distressed sale of Wachovia, and the failure of
Washington Mutual. Eight major U.S. financial institutions effectively
failed in 6 months - six of them in September alone.
As a result, credit markets froze. The commercial paper market shut
down, 3-month Treasuries dipped below zero, and a money market mutual
fund "broke the buck" for only the second time in history,
precipitating a $200 billion net outflow of funds from that market.
The savings of millions of Americans and the ability of businesses and
consumers to access affordable credit were put at serious risk.
*The Need for Government Action*
Recognizing the threat to our financial system and to every American
family, Secretary Paulson and Chairman Bernanke knew the time had come
to provide government support for the U.S. financial system. On
September 18, they went to the Congress to ask for unprecedented
authority to prevent a financial collapse. Congress also recognized
this threat and just two weeks later, on October 3, the Congress
passed and President Bush signed into law the Emergency Economic
Stabilization Act of 2008. We worked hard with the Congress to build
tremendous flexibility into the legislation because the one constant
throughout the credit crisis has been its unpredictability.
In our discussions with the Congress, we focused on a two part plan:
one, our initial, market-based plan to purchase illiquid mortgage
assets as a means to attract private capital to the financial system,
and two, providing sufficient flexibility to deal with any individual
contingencies that arose. In the two weeks between the time we
submitted the draft legislation and the time the bill passed, credit
markets deteriorated more quickly than we had expected. One key
measure we looked at was LIBOR-OIS spread - a measure of perceived
credit risk in the financial system. Typically, 5 - 10 basis points,
on September 1, the one month spread was 47 basis points. By the 18th,
when we first went to Congress, the spread had climbed to 135 basis
points. By the time the bill passed, just two week later on October 3,
the spread had nearly doubled to 263 basis points.
Why did we switch from illiquid asset purchases to capital
investments? Simply put, our Nation was faced with the potential
imminent collapse of our banking and financial system and more
immediate and powerful actions were needed. It was clear to Secretary
Paulson and Chairman Bernanke that we needed to use the authority and
flexibility granted under the law as aggressively as possible to
quickly stabilize the system. Purchasing equity in healthy banks
around the country would be a faster and more direct way to inject
much-needed capital into the system and restore confidence compared
with asset purchases. We began immediately designing a capital
purchase program in addition to continuing work on illiquid asset
purchases, which would take longer to implement.
Meanwhile, credit markets continued to deteriorate. On October 10, the
LIBOR-OIS spread had risen to 338 basis points. So, four days later,
on October 14, when our Capital Purchase Program was ready, we
announced a plan to invest $250 billion in banks and savings
institutions of all sizes, in combination with the FDIC's announcement
of its guarantee of senior bank debt. These combined actions were
taken to build confidence in the U.S. financial system. We believe
these actions were successful.
The Capital Purchase Program was not a bailout of participating banks.
Only healthy, viable banks are eligible for the program and it is
designed to generate a positive return to the taxpayer.
At the same time, we continued working hard on our illiquid asset
purchase programs. We were keenly aware that, while $700 billion is a
large sum of money, it is a finite amount. We needed to use the
available funds to provide the maximum benefit to the system, while
leaving enough dry powder to deal with contingencies. Throughout the
process, we carefully monitored how the markets were responding to our
actions and conditions in the broader economy. We asked ourselves:
Would banks apply for the capital? Would credit markets respond? What
was happening in the economy?
We were pleased that healthy banks of all sizes were signing up for
the program and credit markets were showing signs of thawing. But the
economic indicators were less positive. On October 31, data on third
quarter GDP showed negative 0.3 percent growth. In addition, data
released on October 28 showed that through August, home prices in 10
major cities had fallen 18 percent over the previous year.
A large contingency also arose that threatened the financial system
and we had to restructure the Federal Reserve's loan to AIG, using $40
billion of TARP funds. With about half the original $700 billion
available for asset purchases, we asked ourselves: would such a
program still be the best approach? For an asset purchase program to
be effective, it must be done in very large scale. We concluded that
capital would provide the most benefit given available resources.
It is also important to support the non-banking market, which is
essential to helping consumers, businesses and our economy get the
credit they need. The Federal Reserve is setting-up a $200 billion
program, the Term Asset-Backed Securities Loan Facility (TALF). With
$20 billion from the TARP, we will help make it easier for American
families to get affordable auto loans, student loans, and consumer
credit, as well as loans for small businesses.
*Where We Are Today*
As of today, we have fully allocated the first $350 billion and, at
the President-Elect's request, President Bush has asked Congress to
make available the remaining $350 billion for the next Administration.
As I mentioned when I opened, we have invested $189 billion of the
$250 billion Capital Purchase Program in 257 institutions in 42 states
across the country, as well as Puerto Rico. There is a huge demand for
the program: the number of applications under-review at the regulators
is in the thousands, representing every state in the country, and
hundreds more have already been pre-approved by Treasury. We are
pleased with the large number of banks that have applied. As I also
noted above, we have also allocated $20 billion for the TALF to
support consumer and small business lending. Today, the LIBOR-OIS
spread has fallen to 19 basis points. We believe the combined actions
of Treasury, the Federal Reserve and FDIC have prevented a financial
collapse.
We have also had to deal with several contingencies, including a
possible loss of confidence in Citigroup, and the impending failures
of AIG and the domestic auto companies which have consumed the
remaining allocation within the first $350 billion. We believe that
when government intervention is required to prevent the failure of a
firm, the firm's shareholders should pay a high price to discourage
imprudent risk-taking in the future. Our actions to stabilize Fannie
Mae, Freddie Mac and AIG demonstrate this perspective where existing
shareholders were severely diluted and the taxpayers received warrants
for 80 percent of the companies.
This approach has challenges, however, when the system as a whole
comes under pressure and several similarly-situated institutions are
at risk. We have worked hard to develop programs to encourage private
capital to flow into the banking sector. Whenever possible, we have
designed programs that avoid the government controlling private
institutions. We have used a combination of tools such as preferred
investments and asset guarantees as a means to enhance the confidence
of systemically-important institutions on a case-by-case basis.
*Update on Lending*
People recently have begun to ask what the banks are doing with the
money we've invested in them. We designed important features into our
investment contracts to limit what banks can do with the money: one,
we restricted dividend increases and share repurchases and, two,
placed restrictions on executive compensation. By increasing a bank's
capital, the bank will have strong economic incentives to deploy the
capital profitably. Banks are in the business of lending and they will
provide credit to sound borrowers whenever possible. They may also use
the capital to absorb losses as part of loan write-downs and
restructurings. If a bank doesn't put the new capital to work earning
a profit or reducing a loss, its returns for its shareholders will
suffer.
What about mergers and acquisitions? Why didn't Treasury prohibit
them? We must remember that when a failing bank is acquired by a
healthy bank, the community of the failing bank is better off than if
the bank had been allowed to fail. Branches and financial services in
that community are usually preserved. Costs to the taxpayers via the
FDIC deposit fund are also lower than had the bank been allowed to
fail. Prudent mergers and acquisitions can strengthen our financial
system and our communities, while protecting taxpayers.
People then ask: when will we see banks making new loans? It is
important to note that over $60 of the $250 billion CPP has yet to be
received by the banks. Treasury is executing at a rapid speed, but it
will take some time to review and fund all the remaining applications.
This capital needs to get into the system before it can have the
desired effect. In addition, we are still at a point of low confidence
- both due to the financial crisis and the economic downturn. As long
as confidence remains low, banks will remain cautious about extending
credit, and consumers and businesses will remain cautious about taking
on new loans. As confidence returns, Treasury expects to see more
credit extended.
This reduced demand for and provision of credit is common in an
economic downturn. During the past nine recessions, inflation-adjusted
total private sector lending per quarter has contracted on average 30
percent from peak to trough, while real GDP has contracted 2.0
percent. So we should not be surprised that lending and borrowing will
be lower during this current economic downturn. We absolutely need our
banks to continue to make credit available - especially given the
disruption in the non-banking financial markets. Our banks' role as
provider of credit in our economy is even more important now. But we
must not attempt to force them to make loans whose risks they are not
comfortable with. Bad lending practices were at the root cause of this
crisis. Returning to those practices will not help end this financial
turmoil.
People have then asked: how will you track lending activity? Treasury
has been working with the banking regulators to design a program to
measure the activities of banks that have received TARP capital. We
plan to use quarterly call report data to study changes in the balance
sheets and intermediation activities of institutions we have invested
in and compare their activities to a comparable set of institutions
that have not received TARP capital investments. Because call report
data is infrequent, we also plan to augment that analysis with a
selection of data we plan to collect monthly from the largest banks we
have invested in for a more frequent snapshot.
The provision of credit that is vital to our economy will not
materialize as fast as any of us would like, but it will happen much
faster as a result of deploying resources from the TARP to stabilize
the system and increase capital in our banks.
*Conclusion*
The EESA is not an economic stimulus plan, nor is it an economic
growth plan. It was one of several initiatives taken by the Federal
government to stabilize the financial system - a necessary
precondition to any economic recovery. We believe the combined actions
of Treasury, the Federal Reserve and FDIC have helped stabilize the
financial system and prevent a financial collapse. Nonetheless, the
current crisis took years to build up and will take time to work
through, and we still face some real economic challenges. As Secretary
Paulson has said, there is no single action the Federal government can
take to end the financial market turmoil and the economic downturn,
but the authorities Congress provided last fall dramatically expanded
the tools available to address the needs of our system. Thank you and
I would be happy to take your questions.
- 30 -
Message: 28 From: U.S. Department of the Treasury
<subscriptions@subscriptions.treas.gov> Date: Tue, 13 Jan 2009
08:42:49 -0600 (CST) Subject: Interim Asst Sec Kashkari Review of
Financial Markets Crisis and TARP
Interim Asst Sec Kashkari Review of Financial Markets Crisis and TARP
[ http://www.treas.gov/press/releases/hp1349.htm ]
January 13, 2009
HP-1349
*Interim Assistant Secretary for Financial Stability Neel Kashkari
Review of the Financial Market Crisis and the Troubled Assets Relief
Program*
*Washington* - Good morning. Thank you, Dean Daly, for that kind
introduction. I would also like to thank the McDonough School of
Business at Georgetown for hosting us today.
Today, I will provide a review of the financial market crisis and
Treasury's strategy to implement the Troubled Assets Relief Program
(TARP) to promote financial stability. First, I will briefly explain
why the Administration took the unprecedented action to request
Congressional approval for a $700 billion program to support the
financial system. Second, I will explain why- as a first step- we
decided to invest in healthy banks through purchases of capital,
rather than buying illiquid assets. Third, I will discuss how the
capital is being used by recipient banks. Finally, I look forward to
answering your questions.
Before I begin, I will give you a brief update on the latest
statistics of the Capital Purchase Program, a program to invest in
healthy banks of all sizes. On Friday, we executed 43 investments,
bringing our total investment to $189 billion in 257 banks in 42
states and Puerto Rico. The largest investment was $25 billion and the
smallest investment $1 million. In addition, after extensive
preparation, we have also completed a term sheet for S-corps to
participate in this program. The S-corp term sheet will be posted on
the Treasury website tomorrow. The application period will open at
that time and will remain open for 30 days.
*The Importance of the Financial System*
Let me begin by reviewing how the financial system affects Americans
and their families. Banks serve as the primary intermediary between
borrowers and savers. Americans save for their futures and their
families. These savings of individual Americans are combined and made
available to other people and businesses who need to borrow money for
their specific needs. The financial system links millions of savers
around the country with millions borrowers around the country through
billions of individual transactions. This extraordinarily complex, but
usually efficient system includes both banks, where people have their
savings accounts, and other financial institutions that provide, for
example, car loans and student loan financing. This system has
developed over our Nation's history and it is built on confidence and
on trust. Savers - be they individuals or businesses - must have
confidence in the people and institutions they entrust with their
money. And because no single bank can touch every family or every
business, banks must have confidence to lend to each other for the
system to work. If the financial system were to collapse, families
might not be able to access the money they have saved. The economic
implications of a financial system collapse are profound - for every
single American.
*Causes of the Credit Crisis*
With that background, let me briefly describe the fundamental causes
of the credit crisis. The seeds of the credit crisis were planted
during a decade of benign economic conditions, including low interest
rates and low inflation. Financial innovation, which has served the
U.S. economy well over the years, also accelerated. Investors gained
increasing confidence in the effectiveness of new financial products
to diversify and distribute risks. With this perceived reduction in
risk, leverage increased across the financial system. Underwriting
standards for mortgages weakened as more and more reliance was placed
on the value of the collateral (the home) rather than the willingness
and ability of the borrower to repay the loan out of income.
Homeowners took out ever larger mortgages with little or no down
payment and little or no documentation of income. Regulators,
investors and homeowners took comfort from the belief that home prices
only go up.
As we have learned, that belief was incorrect. To understand the
consequence of that miscalculation, consider that the residential
mortgage market in the United States is an $11 trillion market. With
banks' highly leveraged balance sheets and minimal down payments on
home loans, even a minor drop in home prices and rise in defaults can
result in a large hit to banks' capital. Large losses can threaten the
solvency of financial institutions.
Rooted in housing, this credit crisis is complicated by a number of
related factors: First, home prices adjust downward slowly, in part
due to homeowners' reluctance to realize losses; most people would
rather keep their home than sell for a loss if they can avoid it since
it usually is their largest financial asset. Next, this necessary
housing correction, which is not over, is setting the pace of the
credit crisis. Finally, this slow adjustment makes it difficult to
value mortgages and mortgage-backed securities, because investors
don't know for sure where the bottom of the housing market is and when
it will be reached.
But investors are forward looking. With the high leverage in our
financial system, the large and necessary housing correction, and
credit problems arising in other sectors of the economy, investors
quickly realized that the financial system had insufficient capital to
withstand the expected losses. But the opacity of mortgage-backed
securities and the difficulty in valuing mortgage assets meant it was
hard for investors to determine exactly which institutions were at
greatest risk.
Not wanting to be exposed to a failing institution, but also not being
able to determine for certain which institutions were at risk,
investors pulled back wherever they could.
A capital problem for some institutions led to a liquidity problem for
all institutions. That liquidity problem created a serious risk that
our financial system as a whole, both in the U.S. and abroad, could
fail.
Secretary Paulson and Chairman Bernanke recognized early that there
might come a time when the private markets would become unwilling to
provide the necessary capital to our financial system to deal with the
large losses from the housing correction. In such a scenario, only the
Federal government would be in a position to support the financial
system - to step in to provide the needed capital to prevent a
collapse. Government intervention was not our first choice, as it
often has unintended, far-reaching consequences. But it was a
necessary choice.
Capital is essential for a healthy financial system; it permits banks
to take risks and absorb losses while honoring their obligations to
depositors and other creditors. During an economic downturn, many
businesses and consumers want to see extra capital in their bank in
order to have confidence the bank is sound and their money safe.
Similarly, in such times, many banks want to see increased capital in
other banks in order to have confidence to do business with them.
Although government leaders have numerous tools to combat financial
market crises, there was no existing tool to provide capital to the
financial system. In early 2008, we evaluated numerous policy
alternatives and focused on a program to strengthen banks' balance
sheets by purchasing illiquid mortgage assets in very large scale. By
ridding their balance sheets of hard to value and troubled assets,
banks would be better able to attract the private capital needed to
recapitalize our system. We all hoped such government intervention
would not become necessary, but recognized the possibility and began
contingency planning.
In late summer, after the failure of Bear Stearns, the crisis
intensified and our financial institutions came under even more
pressure from deteriorating market conditions and the loss of
confidence. In a very short period of time, some of our largest
financial institutions failed. In July, IndyMac failed. In the month
of September alone, we witnessed the conservatorship of Fannie Mae and
Freddie Mac, the bankruptcy of Lehman Brothers, the rescue of AIG by
the Fed, the distressed sale of Wachovia, and the failure of
Washington Mutual. Eight major U.S. financial institutions effectively
failed in 6 months - six of them in September alone.
As a result, credit markets froze. The commercial paper market shut
down, 3-month Treasuries dipped below zero, and a money market mutual
fund "broke the buck" for only the second time in history,
precipitating a $200 billion net outflow of funds from that market.
The savings of millions of Americans and the ability of businesses and
consumers to access affordable credit were put at serious risk.
*The Need for Government Action*
Recognizing the threat to our financial system and to every American
family, Secretary Paulson and Chairman Bernanke knew the time had come
to provide government support for the U.S. financial system. On
September 18, they went to the Congress to ask for unprecedented
authority to prevent a financial collapse. Congress also recognized
this threat and just two weeks later, on October 3, the Congress
passed and President Bush signed into law the Emergency Economic
Stabilization Act of 2008. We worked hard with the Congress to build
tremendous flexibility into the legislation because the one constant
throughout the credit crisis has been its unpredictability.
In our discussions with the Congress, we focused on a two part plan:
one, our initial, market-based plan to purchase illiquid mortgage
assets as a means to attract private capital to the financial system,
and two, providing sufficient flexibility to deal with any individual
contingencies that arose. In the two weeks between the time we
submitted the draft legislation and the time the bill passed, credit
markets deteriorated more quickly than we had expected. One key
measure we looked at was LIBOR-OIS spread - a measure of perceived
credit risk in the financial system. Typically, 5 - 10 basis points,
on September 1, the one month spread was 47 basis points. By the 18th,
when we first went to Congress, the spread had climbed to 135 basis
points. By the time the bill passed, just two week later on October 3,
the spread had nearly doubled to 263 basis points.
Why did we switch from illiquid asset purchases to capital
investments? Simply put, our Nation was faced with the potential
imminent collapse of our banking and financial system and more
immediate and powerful actions were needed. It was clear to Secretary
Paulson and Chairman Bernanke that we needed to use the authority and
flexibility granted under the law as aggressively as possible to
quickly stabilize the system. Purchasing equity in healthy banks
around the country would be a faster and more direct way to inject
much-needed capital into the system and restore confidence compared
with asset purchases. We began immediately designing a capital
purchase program in addition to continuing work on illiquid asset
purchases, which would take longer to implement.
Meanwhile, credit markets continued to deteriorate. On October 10, the
LIBOR-OIS spread had risen to 338 basis points. So, four days later,
on October 14, when our Capital Purchase Program was ready, we
announced a plan to invest $250 billion in banks and savings
institutions of all sizes, in combination with the FDIC's announcement
of its guarantee of senior bank debt. These combined actions were
taken to build confidence in the U.S. financial system. We believe
these actions were successful.
The Capital Purchase Program was not a bailout of participating banks.
Only healthy, viable banks are eligible for the program and it is
designed to generate a positive return to the taxpayer.
At the same time, we continued working hard on our illiquid asset
purchase programs. We were keenly aware that, while $700 billion is a
large sum of money, it is a finite amount. We needed to use the
available funds to provide the maximum benefit to the system, while
leaving enough dry powder to deal with contingencies. Throughout the
process, we carefully monitored how the markets were responding to our
actions and conditions in the broader economy. We asked ourselves:
Would banks apply for the capital? Would credit markets respond? What
was happening in the economy?
We were pleased that healthy banks of all sizes were signing up for
the program and credit markets were showing signs of thawing. But the
economic indicators were less positive. On October 31, data on third
quarter GDP showed negative 0.3 percent growth. In addition, data
released on October 28 showed that through August, home prices in 10
major cities had fallen 18 percent over the previous year.
A large contingency also arose that threatened the financial system
and we had to restructure the Federal Reserve's loan to AIG, using $40
billion of TARP funds. With about half the original $700 billion
available for asset purchases, we asked ourselves: would such a
program still be the best approach? For an asset purchase program to
be effective, it must be done in very large scale. We concluded that
capital would provide the most benefit given available resources.
It is also important to support the non-banking market, which is
essential to helping consumers, businesses and our economy get the
credit they need. The Federal Reserve is setting-up a $200 billion
program, the Term Asset-Backed Securities Loan Facility (TALF). With
$20 billion from the TARP, we will help make it easier for American
families to get affordable auto loans, student loans, and consumer
credit, as well as loans for small businesses.
*Where We Are Today*
As of today, we have fully allocated the first $350 billion and, at
the President-Elect's request, President Bush has asked Congress to
make available the remaining $350 billion for the next Administration.
As I mentioned when I opened, we have invested $189 billion of the
$250 billion Capital Purchase Program in 257 institutions in 42 states
across the country, as well as Puerto Rico. There is a huge demand for
the program: the number of applications under-review at the regulators
is in the thousands, representing every state in the country, and
hundreds more have already been pre-approved by Treasury. We are
pleased with the large number of banks that have applied. As I also
noted above, we have also allocated $20 billion for the TALF to
support consumer and small business lending. Today, the LIBOR-OIS
spread has fallen to 19 basis points. We believe the combined actions
of Treasury, the Federal Reserve and FDIC have prevented a financial
collapse.
We have also had to deal with several contingencies, including a
possible loss of confidence in Citigroup, and the impending failures
of AIG and the domestic auto companies which have consumed the
remaining allocation within the first $350 billion. We believe that
when government intervention is required to prevent the failure of a
firm, the firm's shareholders should pay a high price to discourage
imprudent risk-taking in the future. Our actions to stabilize Fannie
Mae, Freddie Mac and AIG demonstrate this perspective where existing
shareholders were severely diluted and the taxpayers received warrants
for 80 percent of the companies.
This approach has challenges, however, when the system as a whole
comes under pressure and several similarly-situated institutions are
at risk. We have worked hard to develop programs to encourage private
capital to flow into the banking sector. Whenever possible, we have
designed programs that avoid the government controlling private
institutions. We have used a combination of tools such as preferred
investments and asset guarantees as a means to enhance the confidence
of systemically-important institutions on a case-by-case basis.
*Update on Lending*
People recently have begun to ask what the banks are doing with the
money we've invested in them. We designed important features into our
investment contracts to limit what banks can do with the money: one,
we restricted dividend increases and share repurchases and, two,
placed restrictions on executive compensation. By increasing a bank's
capital, the bank will have strong economic incentives to deploy the
capital profitably. Banks are in the business of lending and they will
provide credit to sound borrowers whenever possible. They may also use
the capital to absorb losses as part of loan write-downs and
restructurings. If a bank doesn't put the new capital to work earning
a profit or reducing a loss, its returns for its shareholders will
suffer.
What about mergers and acquisitions? Why didn't Treasury prohibit
them? We must remember that when a failing bank is acquired by a
healthy bank, the community of the failing bank is better off than if
the bank had been allowed to fail. Branches and financial services in
that community are usually preserved. Costs to the taxpayers via the
FDIC deposit fund are also lower than had the bank been allowed to
fail. Prudent mergers and acquisitions can strengthen our financial
system and our communities, while protecting taxpayers.
People then ask: when will we see banks making new loans? It is
important to note that over $60 of the $250 billion CPP has yet to be
received by the banks. Treasury is executing at a rapid speed, but it
will take some time to review and fund all the remaining applications.
This capital needs to get into the system before it can have the
desired effect. In addition, we are still at a point of low confidence
- both due to the financial crisis and the economic downturn. As long
as confidence remains low, banks will remain cautious about extending
credit, and consumers and businesses will remain cautious about taking
on new loans. As confidence returns, Treasury expects to see more
credit extended.
This reduced demand for and provision of credit is common in an
economic downturn. During the past nine recessions, inflation-adjusted
total private sector lending per quarter has contracted on average 30
percent from peak to trough, while real GDP has contracted 2.0
percent. So we should not be surprised that lending and borrowing will
be lower during this current economic downturn. We absolutely need our
banks to continue to make credit available - especially given the
disruption in the non-banking financial markets. Our banks' role as
provider of credit in our economy is even more important now. But we
must not attempt to force them to make loans whose risks they are not
comfortable with. Bad lending practices were at the root cause of this
crisis. Returning to those practices will not help end this financial
turmoil.
People have then asked: how will you track lending activity? Treasury
has been working with the banking regulators to design a program to
measure the activities of banks that have received TARP capital. We
plan to use quarterly call report data to study changes in the balance
sheets and intermediation activities of institutions we have invested
in and compare their activities to a comparable set of institutions
that have not received TARP capital investments. Because call report
data is infrequent, we also plan to augment that analysis with a
selection of data we plan to collect monthly from the largest banks we
have invested in for a more frequent snapshot.
The provision of credit that is vital to our economy will not
materialize as fast as any of us would like, but it will happen much
faster as a result of deploying resources from the TARP to stabilize
the system and increase capital in our banks.
*Conclusion*
The EESA is not an economic stimulus plan, nor is it an economic
growth plan. It was one of several initiatives taken by the Federal
government to stabilize the financial system - a necessary
precondition to any economic recovery. We believe the combined actions
of Treasury, the Federal Reserve and FDIC have helped stabilize the
financial system and prevent a financial collapse. Nonetheless, the
current crisis took years to build up and will take time to work
through, and we still face some real economic challenges. As Secretary
Paulson has said, there is no single action the Federal government can
take to end the financial market turmoil and the economic downturn,
but the authorities Congress provided last fall dramatically expanded
the tools available to address the needs of our system. Thank you and
I would be happy to take your questions.
- 30 -
Message: 29 From: U.S. Department of the Treasury
<subscriptions@subscriptions.treas.gov> Date: Tue, 13 Jan 2009
16:05:16 -0600 (CST) Subject: Treasury Provides TARP Funds to Local
Banks
Treasury Provides TARP Funds to Local Banks [
http://www.treas.gov/press/releases/hp1352.htm ]
"To view or print the PDF content on this page, download the free
Adobe(R) Acrobat(R) Reader(R) [
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January 13, 2009
HP-1352
*Treasury Provides TARP Funds to Local Banks*
*Washington*- The U.S. Treasury Department announced details this week
of a $14.77 billion investment in 43 banks made through its Capital
Purchase Program.
Treasury created the Capital Purchase Program, a part of the Troubled
Asset Relief Program, to help to stabilize and strengthen the U.S.
financial system. Treasury allocated $250 billion under TARP's Capital
Purchase Program to invest in U.S. financial institutions. To date,
the Department has made $192 billion of investments, receiving
preferred stock and warrants from participating institutions.
Investments have ranged from as small as $1 million to as large as $25
billion, financing community banking and Community Development
Financial Institutions in 42 states and Puerto Rico.
Institutions that sell shares to the government must comply with
restrictions on executive compensation [
http://www.treas.gov/press/releases/hp1208.htm ]during the period that
Treasury holds equity issued through this program and agree to
limitations on dividends and stock repurchases. Information about
Treasury's Troubled Asset Relief Program can be found at
http://www.treas.gov/initiatives/eesa/ .
Following are the transaction details:
*Seller *
*Name of Institution *
*City *
*State *
*Price Paid *
Bank of America Corporation
Charlotte
NC
$10,000,000,000
FirstMerit Corporation
Akron
OH
$125,000,000
Farmers Capital Bank Corporation
Frankfort
KY
$30,000,000
Peapack-Gladstone Financial Corporation
Gladstone
NJ
$28,685,000
Commerce National Bank
Newport Beach
CA
$5,000,000
The First Bancorp, Inc.
Damariscotta
ME
$25,000,000
Sun Bancorp, Inc.
Vineland
NJ
$89,310,000
Crescent Financial Corporation
Cary
NC
$24,900,000
American Express Company
New York
NY
$3,388,890,000
Central Pacific Financial Corp.
Honolulu
HI
$135,000,000
Centrue Financial Corporation
St. Louis
MO
$32,668,000
Eastern Virginia Bankshares, Inc.
Tappahannock
VA
$24,000,000
Colony Bankcorp, Inc.
Fitzgerald
GA
$28,000,000
Independent Bank Corp.
Rockland
MA
$78,158,000
Cadence Financial Corporation
Starkville
MS
$44,000,000
LCNB Corp.
Lebanon
OH
$13,400,000
Center Bancorp, Inc.
Union
NJ
$10,000,000
F.N.B. Corporation
Hermitage
PA
$100,000,000
C&F Financial Corporation
West Point
VA
$20,000,000
North Central Bancshares, Inc.
Fort Dodge
IA
$10,200,000
Carolina Bank Holdings, Inc.
Greensboro
NC
$16,000,000
First Bancorp
Troy
NC
$65,000,000
First Financial Service Corporation
Elizabethtown
KY
$20,000,000
Codorus Valley Bancorp, Inc.
York
PA
$16,500,000
MidSouth Bancorp, Inc.
Lafayette
LA
$20,000,000
First Security Group, Inc.
Chattanooga
TN
$33,000,000
Shore Bancshares, Inc.
Easton
MD
$25,000,000
The Queensborough Company
Louisville
GA
$12,000,000
American State Bancshares, Inc.
Great Bend
KS
$6,000,000
Security California Bancorp
Riverside
CA
$6,815,000
Security Business Bancorp
San Diego
CA
$5,803,000
Sound Banking Company
Morehead City
NC
$3,070,000
Mission Community Bancorp
San Luis Obispo
CA
$5,116,000
Redwood Financial Inc.
Redwood Falls
MN
$2,995,000
Surrey Bancorp
Mount Airy
NC
$2,000,000
Independence Bank
East Greenwich
RI
$1,065,000
Valley Community Bank
Pleasanton
CA
$5,500,000
Rising Sun Bancorp
Rising Sun
MD
$5,983,000
Community Trust Financial Corporation
Ruston
LA
$24,000,000
GrandSouth Bancorporation
Greenville
SC
$9,000,000
Texas National Bancorporation
Jacksonville
TX
$3,981,000
Congaree Bancshares, Inc.
Cayce
SC
$3,285,000
New York Private Bank & Trust Corporation
New York
NY
$267,274,000
*-30-*
*REPORTS*
* Chart [ http://www.treas.gov/press/releases/reports/0011309cpptable.pdf ]
Message: 30 From: U.S. Department of the Treasury
<subscriptions@subscriptions.treas.gov> Date: Wed, 14 Jan 2009
12:20:15 -0600 (CST) Subject: Treasury Designates Additional FARC
International Commission Members
Treasury Designates Additional FARC International Commission Members [
http://www.treas.gov/press/releases/hp1353.htm ]
"To view or print the PDF content on this page, download the free
Adobe(R) Acrobat(R) Reader(R) [
http://www.adobe.com/products/acrobat/readstep.html ]."
January 14, 2009
HP-1353
*Treasury Designates Additional FARC International Commission Members*
*
Washington, DC--*The U.S. Department of the Treasury's Office of
Foreign Assets Control (OFAC) today designated three international
representatives of the Revolutionary Armed Forces of Colombia (FARC),
a narco-terrorist organization. The OFAC action was taken pursuant to
the Foreign Narcotics Kingpin Designation Act (Kingpin Act), which
applies financial sanctions against significant foreign narcotics
traffickers and organizations, like the FARC.
"Today's action exposes three additional members of the FARC's
International Commission," said Adam J. Szubin, Director of OFAC. "The
FARC is one of the world's largest suppliers of cocaine and continues
to be Colombia's most notorious and vicious narco-terrorist
organization. This is the seventh action over the past year that OFAC
has taken against this group and we will continue our efforts to
financially isolate the FARC, its leaders and their support network."
The three individuals designated are identified as key members of the
FARC's International Commission: Omar Arturo Zabala Padilla (alias
"Lucas Gualdron"), Maria Remedios Garcia Albert (alias "Soraya" and
"Irene"), and Vlaudin Rodrigo Vega (alias "Carlos Vlaudin"). These
International Commission members represent the FARC in France, Italy,
Switzerland, Spain, and Australia.
As representatives of the FARC and members of its International
Commission, these individuals work abroad to obtain recruits, support,
and protection for the FARC's acts of narcotics trafficking and
terrorism. Omar Arturo Zabala Padilla, the FARC's International
Commission member for France, Italy and Switzerland, directs nearly
80% of the FARC's activities in Europe, which include contacts with
other terrorist groups and arms deals. Maria Remedios Garcia Albert,
the FARC's International Commission member for Spain, a key liaison
between the leadership of the FARC and its supporters based in Europe,
was arrested by Spanish authorities on July 26, 2008 and later
released pending trial. Files recovered from the computer of Raul
Reyes, a top FARC leader who was killed by Colombian forces in a March
2008 raid, noted the "special support" of Vlaudin Rodrigo Vega, the
FARC's International Commission member for Australia.
In 2003, President George W. Bush identified the FARC as a significant
foreign narcotics trafficker, or "drug kingpin," pursuant to the
Kingpin Act. This followed the State Department's designation of the
FARC as a Specially Designated Global Terrorist in 2001 pursuant to
Executive Order 13224, and its 1997 designation of the FARC as a
Foreign Terrorist Organization. To date, OFAC has designated 77
individuals and 10 entities for their support to the FARC. This OFAC
action continues ongoing efforts under the Kingpin Act to apply
financial measures against significant foreign narcotics traffickers
and their organizations worldwide. In addition to the 75 drug kingpins
that have been designated by the President, 530 businesses and
individuals have been designated by OFAC pursuant to the Kingpin Act
since June 2000.
Today's action freezes any assets the designated individuals may have
under U.S. jurisdiction and prohibits U.S. persons from conducting
transactions or dealings in the property interests of the designees.
Penalties for violations of the Kingpin Act range from civil penalties
of up to $1,075,000 per violation to more severe criminal penalties.
Criminal penalties for corporate officers may include up to 30 years
in prison and fines of up to $5,000,000. Criminal fines for
corporations may reach $10,000,000. Other individuals face up to 10
years in prison, and fines pursuant to Title 18 of the United States
Code, for criminal violations of the Kingpin Act.
For a complete list of the individuals and entities designated today,
please visit:
_http://www.treasury.gov/offices/enforcement/ofac/actions/index.shtml_
[ http://www.treasury.gov/offices/enforcement/ofac/actions/index.shtml
]
To view previous OFAC actions directed against the FARC, please visit:
* _Treasury Action against the _ FARC on September 30, 2008. [
http://wwwtreas.gov/press/releases/hp1169.htm ]_
http://www.treas.gov/press/releases/hp1169.htm_*
* Treasury Action against the FARC on September 12, 2008. [
http://www.ustreas.gov/press/releases/hp1132.htm ]_
http://www.ustreas.gov/press/releases/hp1132.htm_
* Treasury Action against the FARC on July 31, 2008 [
http://www.treas.gov/press/releases/hp1096.htm ].
http://www.treas.gov/press/releases/hp1096.htm
* Treasury Action against the FARC on May 7, 2008. [
http://www.treas.gov/press/releases/hp966.htm ]
http://www.treas.gov/press/releases/hp966.htm
* _Treasury Action against the FARC on April 22, 2008. [
http://www.treas.gov/press/releases/hp938.htm
]http://www.treas.gov/press/releases/hp938.htm_
* Treasury Action against the FARC on January 15, 2008. [
http://www.treas.gov/press/releases/hp762.htm ]
http://www.treas.gov/press/releases/hp762.htm
* Treasury Action against the FARC on November 1, 2007. [
http://www.treas.gov/press/releases/hp661.htm ]
(http://www.treas.gov/press/releases/hp661htm
* Treasury Action against the FARC on September 28, 2006. [
http://www.treas.gov/press/releases/hp119.htm ]
http://www.treas.gov/press/releases/hp119.htm
* Treasury Action against the FARC on February 19, 2004 [
http://www.ustreas.gov/press/releases/js1181.htm ].
http://www.ustreas.gov/press/releases/js1181.htm
-30-*
*REPORTS*
* Designation Chart [
http://www.treas.gov/press/releases/reports/farc international
representatives chart (final).pdf ]
Message: 31 From: U.S. Department of the Treasury
<subscriptions@subscriptions.treas.gov> Date: Wed, 14 Jan 2009
16:40:32 -0600 (CST) Subject: Treasury Releases Term Sheet for S Corps
Treasury Releases Term Sheet for S Corps [
http://www.treas.gov/press/releases/hp1354.htm ]
"To view or print the PDF content on this page, download the free
Adobe(R) Acrobat(R) Reader(R) [
http://www.adobe.com/products/acrobat/readstep.html ]."
January 14, 2009
hp1354
*Treasury Releases Capital Purchase Program Term *
*
Washington*- The U.S. Treasury Department today released the term
sheet and answers to frequently asked questions for qualified
financial institutions applying to the Capital Purchase Program that
are S corporations. The term sheet provides for issuances of debt
instead of stock, unlike other term sheets for the Capital Purchase
Program.
S corporations are corporations which make a valid election to be
taxed under Subchapter S of Chapter 1 of the Internal Revenue Code. S
corporations are generally not subject to corporate income tax, but
their shareholders must take into account their share of the S
corporation's income. To preserve their status, S Corporations cannot,
among other restrictions, issue a second class of stock such as the
preferred stock issued to Treasury by other qualified financial
institutions under the Capital Purchase Program. These institutions
cannot have more than 100 shareholders who, subject to limited
exceptions, must be natural persons, not other companies or
institutions.
S Corporations will have until February 13 to apply with their federal
banking agency using forms on the Treasury's _Troubled Assets Relief
Program website_ [ http://www.treas.gov/initiatives/eesa/ ].
Treasury already has provided capital to 257 large and small financial
institutions in 42 states and Puerto Rico. The largest investment was
$25 billion and the smallest investment has been $1 million. Among the
institutions funded to date were several certified community
development financial institutions, which the Treasury exempts from
warrant requirements. Today's announcement furthers Treasury's
assurance that the Capital Purchase Program has been and will continue
to be available to community banks across the nation, many of which
have already applied and have received funds under the program.
*-30-
*
*REPORTS*
* Term Sheet - S-Corporations [
http://www.treas.gov/initiatives/eesa/docs/scorp-term-sheet.pdf ]
* FAQ - S-Corporations [ http://www.treas.gov/initiatives/eesa/faqs.shtml ]
Message: 32 From: U.S. Department of the Treasury
<subscriptions@subscriptions.treas.gov> Date: Thu, 15 Jan 2009
10:20:51 -0600 (CST) Subject: U.S. International Reserve Position
U.S. International Reserve Position [
http://www.treas.gov/press/releases/200911511151929958.htm ]
January 15, 2009
2009-1-15-11-15-19-29958
*U.S. International Reserve Position*
The Treasury Department today released U.S. reserve assets data for
the latest week. As indicated in this table, U.S. reserve assets
totaled $77,315 million as of the end of that week, compared to
$78,006 million as of the end of the prior week.
I. Official reserve assets and other foreign currency assets
(approximate market value, in US millions)
January 9, 2009
A. Official reserve assets (in US millions unless otherwise specified) 1
Euro
Yen
Total
(1) Foreign currency reserves (in convertible foreign currencies)
77,315
(a) Securities
9,326
14,328
23,654
of which: issuer headquartered in reporting country but located abroad
0
(b) total currency and deposits with:
(i) other national central banks, BIS and IMF
10,736
7,008
17,744
ii) banks headquartered in the reporting country
0
of which: located abroad
0
(iii) banks headquartered outside the reporting country
0
of which: located in the reporting country
0
(2) IMF reserve position 2
7,658
(3) SDRs 2
9,310
(4) gold (including gold deposits and, if appropriate, gold swapped) 3
11,041
--volume in millions of fine troy ounces
261.499
(5) other reserve assets (specify)
7,908
--financial derivatives
--loans to nonbank nonresidents
--other (foreign currency assets invested through reverse repurchase agreements)
7,908
B. Other foreign currency assets (specify)
--securities not included in official reserve assets
--deposits not included in official reserve assets
--loans not included in official reserve assets
--financial derivatives not included in official reserve assets
--gold not included in official reserve assets
--other
II. Predetermined short-term net drains on foreign currency assets
(nominal value)
Maturity breakdown (residual maturity)
Total
Up to 1 month
More than 1 and up to 3 months
More than 3 months and up to 1 year
1. Foreign currency loans, securities, and deposits
--outflows (-)
Principal
Interest
--inflows (+)
Principal
Interest
2. Aggregate short and long positions in forwards and futures in
foreign currencies vis-a-vis the domestic currency (including the
forward leg of currency swaps)
(a) Short positions ( - ) 4
-520,264
-351,882
-168,383
(b) Long positions (+)
3. Other (specify)
--outflows related to repos (-)
--inflows related to reverse repos (+)
--trade credit (-)
--trade credit (+)
--other accounts payable (-)
--other accounts receivable (+)
III. Contingent short-term net drains on foreign currency assets (nominal value)
Maturity breakdown (residual maturity, where applicable)
Total
Up to 1 month
More than 1 and up to 3 months
More than 3 months and up to 1 year
1. Contingent liabilities in foreign currency
(a) Collateral guarantees on debt falling due within 1 year
(b) Other contingent liabilities
2. Foreign currency securities issued with embedded options (puttable bonds)
3. Undrawn, unconditional credit lines provided by:
(a) other national monetary authorities, BIS, IMF, and other
international organizations
--other national monetary authorities (+)
--BIS (+)
--IMF (+)
(b) with banks and other financial institutions headquartered in the
reporting country (+)
(c) with banks and other financial institutions headquartered outside
the reporting country (+)
Undrawn, unconditional credit lines provided to:
(a) other national monetary authorities, BIS, IMF, and other
international organizations
--other national monetary authorities (-)
--BIS (-)
--IMF (-)
(b) banks and other financial institutions headquartered in reporting
country (- )
(c) banks and other financial institutions headquartered outside the
reporting country ( - )
4. Aggregate short and long positions of options in foreign currencies
vis-a-vis the domestic currency
(a) Short positions
(i) Bought puts
(ii) Written calls
(b) Long positions
(i) Bought calls
(ii) Written puts
PRO MEMORIA: In-the-money options 11 [
http://www.imf.org/external/np/sta/ir/usa/eng/curusa.htm#11 ]
(1) At current exchange rate
(a) Short position
(b) Long position
(2) + 5 % (depreciation of 5%)
(a) Short position
(b) Long position
(3) - 5 % (appreciation of 5%)
(a) Short position
(b) Long position
(4) +10 % (depreciation of 10%)
(a) Short position
(b) Long position
(5) - 10 % (appreciation of 10%)
(a) Short position
(b) Long position
(6) Other (specify)
(a) Short position
(b) Long position
IV. Memo items
(1) To be reported with standard periodicity and timeliness: [
http://www.imf.org/external/np/sta/ir/usa/eng/curusa.htm#12 ]
(a) short-term domestic currency debt indexed to the exchange rate
(b) financial instruments denominated in foreign currency and settled
by other means (e.g., in domestic currency) [
http://www.imf.org/external/np/sta/ir/usa/eng/curusa.htm#13 ]
--nondeliverable forwards
--short positions
--long positions
--other instruments
(c) pledged assets [
http://www.imf.org/external/np/sta/ir/usa/eng/curusa.htm#14 ]
--included in reserve assets
--included in other foreign currency assets
(d) securities lent and on repo [
http://www.imf.org/external/np/sta/ir/usa/eng/curusa.htm#15 ]
8,069
--lent or repoed and included in Section I
--lent or repoed but not included in Section I
--borrowed or acquired and included in Section I
--borrowed or acquired but not included in Section I
8,069
(e) financial derivative assets (net, marked to market)
--forwards
--futures
--swaps
--options
--other
(f) derivatives (forward, futures, or options contracts) that have a
residual maturity greater than one year, which are subject to margin
calls.
--aggregate short and long positions in forwards and futures in
foreign currencies vis-a-vis the domestic currency (including the
forward leg of currency swaps)
(a) short positions ( - )
(b) long positions (+)
--aggregate short and long positions of options in foreign currencies
vis-a-vis the domestic currency
(a) short positions
(i) bought puts
(ii) written calls
(b) long positions
(i) bought calls
(ii) written puts
(2) To be disclosed less frequently:
(a) currency composition of reserves (by groups of currencies)
77,315
--currencies in SDR basket
77,315
2--currencies not in SDR basket
--by individual currencies (optional)
*Notes:*
1/ Includes holdings of the Treasury's Exchange Stabilization Fund
(ESF) and the Federal Reserve's System Open Market Account (SOMA),
valued at current market exchange rates. Foreign currency holdings
listed as securities reflect marked-to-market values, and deposits
reflect carrying values.
2/ The items, "2. IMF Reserve Position" and "3. Special Drawing Rights
(SDRs)," are based on data provided by the IMF and are valued in
dollar terms at the official SDR/dollar exchange rate for the
reporting date. The entries for the latest week reflect any necessary
adjustments, including revaluation, by the U.S. Treasury to IMF data
for the prior month end.
3/ Gold stock is valued monthly at $42.2222 per fine troy ounce.
4/ The short positions reflect foreign exchange acquired under
reciprocal currency arrangements with certain foreign central banks.
The foreign exchange acquired is not included in Section I, "official
reserve assets and other foreign currency assets," of the template for
reporting international reserves. However, it is included in the
broader balance of payments presentation as "U.S. Government assets,
other than official reserve assets/U.S. foreign currency holdings and
U.S. short-term assets."
Message: 33 From: U.S. Department of the Treasury
<subscriptions@subscriptions.treas.gov> Date: Thu, 15 Jan 2009
13:40:09 -0600 (CST) Subject: Treasury Targets Financial Networks of
Key Supporters of the Burmese Junta
Treasury Targets Financial Networks of Key Supporters of the Burmese
Junta [ http://www.treas.gov/press/releases/hp1355.htm ]
January 15, 2009
HP-1355
*Treasury Targets Financial Networks of Key Supporters of the Burmese Junta*
*
Washington, DC--*The U.S. Department of the Treasury's Office of
Foreign Assets Control (OFAC) today applied additional sanctions
against key financial backers of the Burmese regime pursuant to the
Tom Lantos Block Burmese JADE (Junta's Anti-Democratic Efforts) Act of
2008 and Executive Orders 13448 and 13464.
"Congress and the Administration have made clear the need to apply
vigorous sanctions against the Burmese junta as long as it continues
to suppress democratic dissent," said OFAC Director Adam J. Szubin.
"The junta's imprisonment of prominent democracy advocates confirms
Burma's unwillingness to abide by international commitments and
underscores the need to maintain pressure against one of the world's
worst violators of human rights."
Today's action adds two individuals and 14 companies to OFAC's List of
Specially Designated Nationals. OFAC has now subjected 100 individuals
and entities to its Burma sanctions, targeting key state-owned
enterprises, senior junta officials, regime cronies and their business
networks.
This most recent action targets regime cronies Zaw Zaw and Win Aung,
along with their business networks and the business networks of two
already-designated cronies of the Burmese junta, Tay Za and Steven
Law.
Zaw Zaw is the managing director of the Max Myanmar Group of
Companies, a Burmese entity with interests in the gem, timber,
construction, and tourism industries. Max Myanmar has provided
important services in support of the Burmese junta, particularly in
the form of construction projects. Treasury's action targets eight
companies of the Max Myanmar Group as well as Zaw Zaw's
Singapore-based company, Max Singapore International Pte. Ltd.
Win Aung has made large financial donations to the Burmese junta and
has provided services in support of the regime on significant
construction projects. Win Aung is being designated along with two of
his companies, Dagon International Limited and Dagon Timber Limited.
OFAC is levying a third round of sanctions against the financial
network of Tay Za, a notorious regime henchman and arms dealer who was
listed by the President in the Annex to Executive Order 13448 on
October 18, 2007, an Executive Order issued in response to the Burmese
junta's brutal crackdown on pro-democracy protesters. Today's action
targets Espace Avenir, a Rangoon hotel owned or controlled by Tay Za.
In addition, today's action targets Sentosa Treasure Pte. Ltd., a
Singaporean firm owned by Cecilia Ng, who was designated on February
25, 2008, along with her husband, junta crony Steven Law. Also
designated are nine firms that previously had been identified as being
owned by Ng.
Finally, OFAC is targeting Myanmar Ivanhoe Copper Company Limited
(MICCL), a joint venture owned or controlled by the Burmese
state-owned No. 1 Mining Enterprise, which was designated on July 29,
2008. MICCL controls the Monywa copper project, the biggest of its
kind in the country, located in Myanmar's northwestern Sagaing
division.
As a result of today's action, any assets the designees may have
subject to U.S. jurisdiction are frozen, and all financial and
commercial transactions by any U.S. person with the designated
companies and individuals are prohibited.
*
-30-
*
Message: 34 From: U.S. Department of the Treasury
<subscriptions@subscriptions.treas.gov> Date: Thu, 15 Jan 2009
23:40:25 -0600 (CST) Subject: Treasury, Federal Reserve and the FDIC
Provide Assistance to Bank of America
Treasury, Federal Reserve and the FDIC Provide Assistance to Bank of
America [ http://www.treas.gov/press/releases/hp1356.htm ]
"To view or print the PDF content on this page, download the free
Adobe(R) Acrobat(R) Reader(R) [
http://www.adobe.com/products/acrobat/readstep.html ]."
January 16, 2009
HP-1356
*Treasury, Federal Reserve and the FDIC Provide Assistance to Bank of America*
*Washington, DC* - The U.S. government entered into an agreement today
with Bank of America to provide a package of guarantees, liquidity
access and capital as part of its commitment to support financial
market stability.
Treasury and the Federal Deposit Insurance Corporation will provide
protection against the possibility of unusually large losses on an
asset pool of approximately $118 billion of loans, securities backed
by residential and commercial real estate loans, and other such
assets, all of which have been marked to current market value. The
large majority of these assets were assumed by Bank of America as a
result of its acquisition of Merrill Lynch. The assets will remain on
Bank of America's balance sheet. As a fee for this arrangement, Bank
of America will issue preferred shares to the Treasury and FDIC. In
addition and if necessary, the Federal Reserve stands ready to
backstop residual risk in the asset pool through a non-recourse loan.
In addition, Treasury will invest $20 billion in Bank of America from
the Troubled Assets Relief Program in exchange for preferred stock
with an 8 percent dividend to the Treasury. Bank of America will
comply with enhanced executive compensation restrictions and implement
a mortgage loan modification program.
Treasury exercised this funding authority under the Emergency Economic
Stabilization Act's Troubled Asset Relief Program (TARP). The
investment was made under the Targeted Investment Program [
http://www.treasury.gov/initiatives/eesa/program-descriptions/tip.shtml
]. The objective of this program is to foster financial market
stability and thereby to strengthen the economy and protect American
jobs, savings, and retirement security.
Separately, the FDIC board announced that it will soon propose rule
changes to its Temporary Liquidity Guarantee Program to extend the
maturity of the guarantee from three to up to 10 years where the debt
is supported by collateral and the issuance supports new consumer
lending.
With these transactions, the U.S. government is taking the actions
necessary to strengthen the financial system and protect U.S.
taxpayers and the U.S economy. As was stated in November when the
first transaction under the Targeted Investment Program was announced,
the U.S. government will continue to use all of our resources to
preserve the strength of our banking institutions and promote the
process of repair and recovery and to manage risks.
-30-
*REPORTS*
* Term Sheet [
http://www.treas.gov/press/releases/reports/011508bofatermsheet.pdf ]
Message: 35 From: U.S. Department of the Treasury
<subscriptions@subscriptions.treas.gov> Date: Fri, 16 Jan 2009
08:06:24 -0600 (CST) Subject: Treasury International Capital (TIC)
Data for November
Treasury International Capital (TIC) Data for November [
http://www.treas.gov/press/releases/hp1357.htm ]
"To view or print the PDF content on this page, download the free
Adobe(R) Acrobat(R) Reader(R) [
http://www.adobe.com/products/acrobat/readstep.html ]."
January 16, 2009
hp-1357
*Treasury International Capital (TIC) Data for November*
Treasury International Capital (TIC) data for November 2008 are
released today and posted on the U.S. Treasury website
(www.treas.gov/tic [ http://wwwtreas.gov/tic ]). The next release,
which will report on data for December, is scheduled for February 17,
2009.
Net foreign purchases of long-term securities were negative $21.7 billion.
* Net foreign purchases of long-term U.S. securities were negative
$56.0 billion. Of this, net purchases by private foreign investors
were negative $18.9 billion, and net purchases by foreign official
institutions were negative $37.1 billion.
* U.S. residents sold a net $34.3 billion of long-term foreign securities
Net foreign acquisition of long-term securities, taking into account
adjustments, is estimated to have been negative $33.7 billion.
Foreign holdings of dollar-denominated short-term U.S. securities,
including Treasury bills, and other custody liabilities increased
$51.1 billion. Foreign holdings of Treasury bills increased $82.1
billion.
Banks' own net dollar-denominated liabilities to foreign residents
increased $39.4 billion.
Monthly net TIC flows were $56.8 billion. Of this, net foreign private
flows were $64.7 billion, and net foreign official flows were negative
$7.9 billion.
*-30-*
*REPORTS*
* (PDF) TIC Monthly Reports on Cross-Border Financial Flows
(Billions of dollars, not seasonally adjusted) [
http://www.treas.gov/press/releases/reports/hp1357_ticdata.pdf ]
Message: 36 From: U.S. Department of the Treasury
<subscriptions@subscriptions.treas.gov> Date: Fri, 16 Jan 2009
11:02:47 -0600 (CST) Subject: Treasury Targets Taiwanese Proliferators
Treasury Targets Taiwanese Proliferators [
http://www.treas.gov/press/releases/hp1359.htm ]
January 16, 2009
HP-1359
*Treasury Targets Taiwanese Proliferators*
*Washington, DC--*The U.S. Department of Treasury today designated two
Taiwanese individuals and two Taiwanese entities pursuant to Executive
Order 13382, an authority aimed at freezing the assets of
proliferators of weapons of mass destruction (WMD) and their
supporters, and at isolating them from the U.S. financial and
commercial systems.
"Proliferators depend on access to the international financial and
commercial systems to support their dangerous trade," said Stuart
Levey, Under Secretary for Terrorism and Financial Intelligence. "Our
action today exposes a North Korean procurement channel, and we urge
governments and companies worldwide to cut this channel off entirely."
Alex H.T. Tsai (Tsai) has been designated for providing, or attempting
to provide, financial, technological or other support for, or goods or
services in support of the Korea Mining Development Trading
Corporation (KOMID), which was identified as a proliferator by
President George W. Bush in the June 2005 Annex to Executive Order
13382.
Tsai has been supplying goods with weapons production capabilities to
KOMID and its subordinates since the late 1990s, and he has been
involved in shipping items to North Korea that could be used to
support North Korea's advanced weapons program. On June 19, 2008, Tsai
was indicted by Taiwan's Taipei District Prosecutors Office for
forging shipping invoices and illegally shipping restricted materials
to North Korea.
Global Interface Company Inc. has been designated for being owned or
controlled by Tsai, who is a shareholder of the company and acts as
its president Tsai is also the general manager of Trans Merits Co.
Ltd., a subsidiary of Global Interface Company Inc. that has been
designated for being owned or controlled by Global Interface Company
Inc.
Alex H.T. Tsai's wife, Lu-chi Su, has also been designated pursuant to
Executive Order 13382 for acting or purporting to act on behalf of,
directly or indirectly, Trans Merits Co. Ltd. Lu-chi Su is an officer
in Global Interface Company Inc. and Trans Merits Co. Ltd. and is
directly involved in the companies' operations.
Designations under E.O. 13382 are implemented by Treasury's Office of
Foreign Assets Control (OFAC), and they prohibit all transactions
between the designees and any U.S. person, and freeze any assets the
designees may have under U.S. jurisdiction.
*_Identifying Information_*
*"ALEX H.T. TSAI"*
AKA: Hsein Tai Tsai
DOB: August 8, 1945
POB: Tainan, Taiwan
Passport Number: 131134049 (Taiwan)
*"LU-CHI SU "*
AKA: Lu-Chi Tsai Su
DOB: February 7 1950
Alt DOB: November 1950
POB: Yun Lin Hsien, Taiwan
Passport Number: 210215095 (Taiwan)
*"GLOBAL INTERFACE COMPANY INC."*
Formerly Known As: Trans Scientific Corp.
Address: 9F-1, No. 22, Hsin Yi Rd., Sec. 2, Taipei, Taiwan
Alt. Address: 1st Floor, No. 49, Lane 280, Kuang Fu S. Road, Taipei, Taiwan;
Business Registration Document Number: 12873346 (Taiwan)
*"TRANS MERITS CO. LTD."*
Address: 1F, NO. 49, Lane 280, Kuang Fu S. Road, Taipei, Taiwan
Business Registration Document Number: 16316976 (Taiwan)
*- 30 -*
Message: 37 From: U.S. Department of the Treasury
<subscriptions@subscriptions.treas.gov> Date: Fri, 16 Jan 2009
12:02:53 -0600 (CST) Subject: Treasury Targets Al Qaida Operatives in
Iran
Treasury Targets Al Qaida Operatives in Iran [
http://www.treas.gov/press/releases/hp1360.htm ]
January 16, 2009
hp-1360
*Treasury Targets Al Qaida Operatives in Iran*
*Washington, D.C. - *The U.S. Department of the Treasury today
designated four al Qaida associates under Executive Order 13224, which
targets terrorists and those providing support to terrorists or acts
of terrorism.
"It is important that Iran give a public accounting of how it is
meeting its international obligations to constrain al Qaida," said
Stuart Levey, Under Secretary for Terrorism and Financial
Intelligence. "Global efforts to financially isolate al Qaida have
made it difficult for the core leadership to raise funds and sustain
itself. Nevertheless, al Qaida remains a very dangerous threat, and it
is crucial to keep targeting the support lines of al Qaida and its
affiliates."
Under E.O. 13224, any assets held by these individuals under U.S.
jurisdiction are frozen and U.S. persons are prohibited from engaging
in any transactions with the designees.
"Even though individual terrorist attacks are relatively inexpensive
to carry out, it costs a great deal of money for al Qaida to operate
globally. These realities demand that we keep up the financial
pressure against al Qaida and like-minded terrorist organizations,"
Levey continued. "Designations have a far reaching impact, deterring
would-be donors from providing financial support to terrorism and
leaving al Qaida leadership struggling to identify much-needed funding
resources."
*"MUSTAFA HAMID"*
AKAs:
Mustafa Muhammad `Atiya Hamid
Mustafa Atiya
Abu Walid al-Misri
Abu al-Walid al-Masri
Abu al-Walid
Hashim al-Makki
POB:
Alexandria, Egypt
DOB:
March 1945
Nationality:
Egyptian
Pakistani
Mustafa Hamid is a senior al Qaida associate who served as a primary
interlocutor between al Qaida and the Government of Iran. Before the
fall of the Taliban, Hamid served as an instructor at a terrorist camp
near Jalalabad that trained in the use of explosives. Hamid is the
father-in-law of senior al Qaida military commander Sayf al-Adl. He
formerly served as a correspondent for a satellite television station,
at the request of senior al Qaida leadership. While living in Iran,
Hamid was harbored by the Islamic Revolutionary Guard Corps (IRGC),
which served as Hamid's point of contact for communications between al
Qaida and Iran.
In the mid-1990s, Mustafa Hamid reportedly negotiated a secret
relationship between Usama Bin Laden and Iran, allowing many al Qaida
members safe transit through Iran to Afghanistan.
In the late 1990s, Mustafa Hamid passed communications between Usama
bin Laden and the Government of Iran. When tensions were high between
Iran and Afghanistan, Mustafa Hamid traveled multiple times from
Kandahar to Tehran as an intermediary for the Taliban.
In late 2001, Mustafa Hamid was in Tehran delivering messages from the
Taliban to the Government of Iran. Hamid also negotiated on behalf of
al Qaida in an attempt to relocate al Qaida families to Iran. As part
of this effort, senior al Qaida member Abu Hafs the Mauritanian
traveled with Hamid and two IRGC members to Tehran for meetings.
Beginning in late 2001, the family of a senior al Qaida military
commander lived with Mustafa Hamid's family in Iran. Separately, in
2002 Mustafa Hamid facilitated contacts between the IRGC and another
senior al Qaida military commander. In mid-2003, Mustafa Hamid was
arrested in Iran along with other al Qaida members and associates.
*"MUHAMMAD RAB'A AL-SA YID AL-BAHTIYTI"*
AKAs:
Muhammad Mahmud Rabi' al-Zayd al-Bahtiti
Muhammad Mahmud al-Bahtiti
Muhammad Rabi' al-Sa'id al-Hatiti
Muhammad Rabi' al-Bahtiti
Abu Dujana al-Masri
DOB:
1971
P013
Al-Sharqiyyah, Egypt
Nationality:
Egyptian
Pakistani
Muhammad Rab'a al-Sayid al-Bahtiyti is a senior member of the Egyptian
Islamic Jihad (EIJ) and an al Qaida operative. Bahtiyti has served as
a trusted aide to his father- in-law Ayman al--Zawahiri.
In the mid-1990s, Bahtiyti served on an al Qaida military committee
and provided military training that included urban warfare tactics for
al Qaida members. Bahtiyti drafted training manuals for al Qaida as
well as a book on security that was used as a template for al Qaida's
surveillance operations.
In 1995, Bahtiyti reportedly was involved in the bombing of the
Egyptian Embassy in Islamabad, Pakistan.
After September 11, 2001, Ayman al-Zawahiri instructed Bahtiyti to
take al-Zawahiri's family to Iran. Bahtiyti reportedly traveled to
Iran with al-Zawahiri's daughters, where he was subsequently
responsible for them. In January 2003, while working from Iran,
Bahtiyti arranged housing on behalf of al Qaida. Bahtiyti reportedly
was arrested by Iranian authorities in mid-2003.
*"ALI SALEH HUSAIN"*
AKAs:
Abu Dahhak
'Ali Salih Husayn al-Dhahak al-Tabuki
Ali Saleh Husain al-Tabuki
'Ali Salih Husayn 'Ula'lah
'Ali Salih Husayn
'Ala'lah Dhahhak al-Tabuki
Abu Dhahak al-Yemeni
DOB:
Circa 1970
POB:
al-Hudaydah, Yemen
Nationality:
Yemeni
Height
5'9"
Ali Saleh Husain is a senior al Qaida associate who had close
relations with Usama bin Laden. Husain was responsible for logistics
pertaining to al Qaida-affiliated fighters and acted as an
interlocutor between al Qaida and its Chechnya-based affiliates.
Husain coordinated with Usama bin Laden on the training of fighters in
terrorist camps in Afghanistan who were preparing to travel to
Chechnya.
Circa early 2001, Husain reportedly arranged a meeting that included a
senior al Qaida operations chief to discuss operations planned against
Israel. In April 2002, al Qaida senior official Abu Zubaydah indicated
that the responsibility for operational meetings for attacks against
Israel had been handed over to Husain. Husain also was reportedly Abu
Zubaydah's secondary point of contact for obtaining fraudulent
passports.
In 2001 after the fall of the Taliban, Husain facilitated the move of
al Qaida-associated fighters, including an al Qaida military
commander, from Afghanistan to Iran. After leaving Afghanistan, Husain
was responsible for smuggling al Qaida members and associates via
networks in Zahedan, Iran. In early 2002, Husain sent $20,000 to a
senior al Qaida lieutenant who had requested financial assistance.
Husain was detained by the Government of Iran in early 2003.
*"SA'AD BIN LADEN"*
AKAs:
Sad Bin Laden
Sa'ad Muhammad Awad Abud
Muhammad Awad
Muhammad 'Awad Adbud
Sa'ad Muhammad Baabood
Abdul Rahman Al-Kahtane
Bin Muhammad Awad Abbud
DOB:
1982
POB:
Saudi Arabia
Nationality:
Saudi Araibian
Passport No.
520951 (Sudan)
530951 (Sudan)
Sa'ad bin Laden, one of Usama bin Laden's sons, has been involved in
al Qaida activities. For example, in late 2001, Sa'ad facilitated the
travel of Usama bin Laden's family members from Afghanistan to Iran.
Sa'ad made key decisions for al Qaida and was part of a small group of
al Qaeda members that was involved in managing the terrorist
organization from Iran. He was arrested by Iranian authorities in
early 2003.
As of September 2008, it was possible that Sa'ad bin Laden was no
longer in Iranian custody.
*-30-***
Message: 38 From: U.S. Department of the Treasury
<subscriptions@subscriptions.treas.gov> Date: Fri, 16 Jan 2009
13:20:26 -0600 (CST) Subject: PWG Private-Sector Committees Best
Practices for Hedge Funds
PWG Private-Sector Committees Best Practices for Hedge Funds [
http://www.treas.gov/press/releases/hp1361.htm ]
January 16, 2009
hp1361
*PWG Private-Sector Committees Finalize Best Practices for Hedge Funds*
*
Washington*-- The two private-sector committees established by the
President's Working Group on Financial Markets (PWG) released their
finalized sets of best practices for asset managers and hedge fund
investors in an effort to increase accountability for participants in
this industry.
The PWG originally tasked the committees, _selected in September 2007_
[ http://www.treas.gov/press/releases/hp575.htm ] and comprised of
well-respected asset managers and investors, with collaborating on
industry issues and developing best practices. The committees released
their draft best practices in April 2008, and provided a public
comment period.
The committees amended the reports in certain respects to further the
fundamental goal of the best practices and to clarify parts of the
report. The final best practices being released today may be viewed at
the committees' website, _www.amaicmte.org_ [ http://www.amaicmte.org/
].
The final best practices for the asset managers call on hedge funds to
adopt comprehensive best practices in all aspects of their business,
including the critical areas of disclosure, valuation of assets, risk
management, business operations, compliance and conflicts of interest.
"Given all of the events of recent months, it is more important than
ever for the hedge fund industry to stand behind a set of far-reaching
best practices that will promote investor protection and reduce
systemic risk, said Eric Mindich, CEO of Eton Park Capital Management,
who chairs the Asset Managers' Committee.
The final best practices for investors include a Fiduciary's Guide,
which provides recommendations to individuals charged with evaluating
the appropriateness of hedge funds as a component of an investment
portfolio, and an Investor's Guide, which provides recommendations to
those charged with executing and administering a hedge fund program if
one is added to the investment portfolio.
Gary Bruebaker, Chief Investment Officer of the Washington State
Investment Board, said, "These final recommendations can provide an
important tool to those who are doing the diligence necessary to
assess and monitor investments in hedge funds."
The committees' work was based on the _PWG's Principles and Guidelines
Regarding Private Pools of Capital issued in February 2007_ [
http://www.treas.gov/press/releases/hp272.htm ], which sought to
enhance investor protections and systemic risk safeguards. The PWG
includes the heads of the U.S. Treasury Department, the Federal
Reserve Board, the Securities and Exchange Commission and the
Commodity Futures Trading Commission.
The PWG Principles and Guidelines Regarding Private Pools of Capital
issued in early 2007 provided a clear but flexible approach to address
issues presented by the growth and dynamism of these investment
vehicles. The PWG designed the principles to endure as financial
markets evolved and identified four stakeholders who contribute to
hedge fund vigilance: asset managers, creditors, investors and
regulators.
Regulators moved to implement these principles and worked to encourage
the industry to adopt the principles. Secretary Paulson in June 2007
announced that the PWG would call upon experienced industry
participants who could lead the charge to raise standards for
improving transparency and accountability. The group selected chairmen
to lead two private-sector committees to develop the best practices.
The PWG and the committee chairmen sought a range of experience and
leadership when considering committee members. The Asset Managers'
Committee includes representatives from a diverse group of hedge fund
managers representing many different investment strategies. The
Investors' Committee includes representatives from labor
organizations, endowments, foundations, corporate and public pension
funds, investment consultants and non-U.S. investors.
The reports can be found at _www.amaicmte.org_ [ http://www.amaicmte.org/ ]
*
-30-
*
Message: 39 From: U.S. Department of the Treasury
<subscriptions@subscriptions.treas.gov> Date: Fri, 16 Jan 2009
13:40:25 -0600 (CST) Subject: Treasury Department Public Engagements
Schedule
Treasury Department Public Engagements Schedule [
http://www.treas.gov/press/schedule.html ]
January 16, 2009
PublicSchedule
*Public Schedule*
*THERE ARE CURRENTLY NO PUBLIC ENGAGEMENTS SCHEDULED*
*-30-
*
Message: 40 From: U.S. Department of the Treasury
<subscriptions@subscriptions.treas.gov> Date: Fri, 16 Jan 2009
13:40:54 -0600 (CST) Subject: Treasury Announces TARP Investments in
Chrysler Financial
Treasury Announces TARP Investments in Chrysler Financial [
http://www.treas.gov/press/releases/hp1362.htm ]
"To view or print the PDF content on this page, download the free
Adobe(R) Acrobat(R) Reader(R) [
http://www.adobe.com/products/acrobat/readstep.html ]."
January 16, 2009
HP-1362
*Treasury Announces TARP Investments in Chrysler Financial*
*
Washington, DC -*The Treasury Department today announced that it will
make a $1.5 billion loan to a special purpose entity created by
Chrysler Financial to finance the extension of new consumer auto loans
as part of a broader program to assist the domestic automotive
industry in becoming financially viable.
The five year loan will pay interest at a rate of one month LIBOR +
100 basis points for the first year and one month LIBOR + 150 basis
points for years two to five. Treasury's loan will be secured by a
senior secured interest in a pool of newly originated consumer
automotive loans, and Chrysler Holding will serve as a guarantor for
certain covenants of Chrysler Financial.
Under the agreement Chrysler Financial must be in compliance with the
executive compensation and corporate governance requirements of
Section 111 of the Emergency Economic Stabilization Act, as well as
enhanced restrictions on executive compensation.
The special purpose entity created by Chrysler Financial will issue
warrants to Treasury in the form of additional notes in an amount
equal to 5 percent of the total size of the loan. The additional notes
will vest 20 percent on the closing date and 20 percent on each
anniversary of the closing date and will have other terms similar to
the loan.
Treasury exercised this funding authority under the Emergency Economic
Stabilization Act's Troubled Asset Relief Program (TARP). The
investment was made under the _Automotive Industry Financing Program_
[ http://www.treasury.gov/initiatives/eesa/program-descriptions/aifp.shtml
].
*REPORTS*
* Term Sheet [ http://www.treas.gov/press/releases/reports/011608
term sheet chrysler fin.pdf ]
Message: 41 From: U.S. Department of the Treasury
<subscriptions@subscriptions.treas.gov> Date: Fri, 16 Jan 2009
14:02:06 -0600 (CST) Subject: Treasury?s First Accounts Program Brings
Thousands Into Financial Mainstream
Treasury?s First Accounts Program Brings Thousands Into Financial
Mainstream [ http://www.treas.gov/press/releases/hp1363.htm ]
January 16, 2009
HP-1363
*Treasury's First Accounts Program Brings Thousands Into Financial Mainstream*
*
Washington--*The Treasury Department, through the First Accounts
Program, has contributed to the opening of over 37,000 savings and
checking accounts in urban, suburban, rural and Native American
communities across the country.
The Treasury released today a report, "Findings from the First
Accounts Program", detailing approaches to bringing unbanked
individuals into the financial mainstream. The report summarizes the
First Accounts Program, a grant program administered by Treasury and
intended to provide financial services to low- and moderate-income
Americans without bank accounts.
"We hope that these findings will be of assistance to researchers,
policy makers and practitioners as they continue their efforts to
bring more American families into the financial mainstream and toward
greater financial security," said Deputy Assistant Secretary for
Financial Education Dan Iannicola, Jr.
The executive summary may be viewed online at:
_http://www.treas.gov/offices/domestic-finance/financial-institution/fin-education/firstaccounts/_
[ http://www.treas.gov/offices/domestic-finance/financial-institution/fin-education/firstaccounts/
]. The full report will be available online later this month. A
limited number of printed copies are available upon request to
_first.accounts@do.treas.gov_ <first.accounts@do.treas.gov>.
*
-30-
*
Message: 42 From: U.S. Department of the Treasury
<subscriptions@subscriptions.treas.gov> Date: Fri, 16 Jan 2009
15:20:08 -0600 (CST) Subject: Treasury Issues Additional Executive
Compensation Rules Under TARP
Treasury Issues Additional Executive Compensation Rules Under TARP [
http://www.treas.gov/press/releases/hp1364.htm ]
"To view or print the PDF content on this page, download the free
Adobe(R) Acrobat(R) Reader(R) [
http://www.adobe.com/products/acrobat/readstep.html ]."
January 16, 2009
hp-1364
*Treasury Issues Additional Executive Compensation Rules Under TARP *
The U.S. Department of the Treasury today issued interim final rules
for reporting and recordkeeping requirements under the executive
compensation standards of the Troubled Asset Relief Program's (TARP)
Capital Purchase Program (CPP).
The new rule issued today requires the chief executive officer (CEO)
to certify annually within 135 days after the financial institution's
fiscal year end that the financial institution and its compensation
committee have complied with these executive compensation standards.
In addition, within 120 days of the closing date of the Securities
Purchase Agreement between the financial institution and the Treasury,
the CEO is required to certify that the compensation committee has
reviewed the senior executives' incentive compensation arrangements
with the senior risk officers to ensure that these arrangements do not
encourage senior executives to take unnecessary and excessive risks
that could threaten the value of the financial institution.
The CEO must provide the 120-day and annual certifications to the TARP
Chief Compliance Officer.
The financial institution is also required to keep records to
substantiate these certifications for at least six years following
each certification and provide these records to the TARP Chief
Compliance Officer upon request.
Treasury originally published executive compensation standards [
http://wwwtreas.gov/press/releases/hp1208.htm ] for CPP last October.
The rules generally apply to the chief executive officer, chief
financial officer, plus the next three most highly compensated
executive officers. These standards include:
* ensuring that incentive compensation for senior executives does
not encourage unnecessary and excessive risks that threaten the value
of the financial institution;
* requiring clawback of any bonus or incentive compensation paid to
a senior executive based on statements of earnings, gains, or other
criteria that are later proven to be materially inaccurate;
* prohibiting the financial institution from making any golden
parachute payment (based on the Internal Revenue Code provision) to a
senior executive; and
* agreeing not to deduct for tax purposes executive compensation in
excess of $500,000 for each senior executive.
The rule also makes a few clarifications and a technical amendment to
the October interim final rule.
Treasury also issued today a revised version of the executive
compensation guidelines applicable to financial institutions
participating in programs for Systemically Significant Failing
Institutions (Treasury Notice 2008-PSSFI) to add similar compliance
reporting and recordkeeping requirements as in today's Interim Final
Rule.
In addition, Treasury is also issuing Frequently Asked Questions
relating to the executive compensation standards to assist financial
institutions' compliance with these standards.
The interim final rule, FAQs, and revised Treasury Notice 2008-PSSFI
are attached.
*-30-*
*REPORTS*
* CPP Executive Compensation Interim Final Rule [
http://www.treas.gov/press/releases/reports/tarp _executive
compensation ifr jan 2009.pdf ]
* Revised Notice 2008-PSSFI [
http://www.treas.gov/press/releases/reports/exec comp pssfi notice
revised.pdf ]
* Executive Compensation FAQ [
http://www.treas.gov/press/releases/reports/tarp _executive
compensation faqs.pdf ]
Message: 43 From: U.S. Department of the Treasury
<subscriptions@subscriptions.treas.gov> Date: Wed, 21 Jan 2009
15:20:37 -0600 (CST) Subject: U.S. International Reserve Position
U.S. International Reserve Position [
http://www.treas.gov/press/releases/20091211682022799.htm ]
January 21, 2009
2009-1-21-16-8-20-22799
*U.S. International Reserve Position*
The Treasury Department today released U.S. reserve assets data for
the latest week. As indicated in this table, U.S. reserve assets
totaled $76,580 million as of the end of that week, compared to
$77,315 million as of the end of the prior week.
I. Official reserve assets and other foreign currency assets
(approximate market value, in US millions)
January 16, 2009
A. Official reserve assets (in US millions unless otherwise specified) 1
Euro
Yen
Total
(1) Foreign currency reserves (in convertible foreign currencies)
76,580
(a) Securities
9,165
14,319
23,484
of which: issuer headquartered in reporting country but located abroad
0
(b) total currency and deposits with:
(i) other national central banks, BIS and IMF
10,541
7,011
17,522
ii) banks headquartered in the reporting country
0
of which: located abroad
0
(iii) banks headquartered outside the reporting country
0
of which: located in the reporting country
0
(2) IMF reserve position 2
7,554
(3) SDRs 2
9,184
(4) gold (including gold deposits and, if appropriate, gold swapped) 3
11,041
--volume in millions of fine troy ounces
261.499
(5) other reserve assets (specify)
7,765
--financial derivatives
--loans to nonbank nonresidents
--other (foreign currency assets invested through reverse repurchase agreements)
7,765
B. Other foreign currency assets (specify)
--securities not included in official reserve assets
--deposits not included in official reserve assets
--loans not included in official reserve assets
--financial derivatives not included in official reserve assets
--gold not included in official reserve assets
--other
II. Predetermined short-term net drains on foreign currency assets
(nominal value)
Maturity breakdown (residual maturity)
Total
Up to 1 month
More than 1 and up to 3 months
More than 3 months and up to 1 year
1. Foreign currency loans, securities, and deposits
--outflows (-)
Principal
Interest
--inflows (+)
Principal
Interest
2. Aggregate short and long positions in forwards and futures in
foreign currencies vis-a-vis the domestic currency (including the
forward leg of currency swaps)
(a) Short positions ( - ) 4
-468,696
-284,207
-184,489
(b) Long positions (+)
3. Other (specify)
--outflows related to repos (-)
--inflows related to reverse repos (+)
--trade credit (-)
--trade credit (+)
--other accounts payable (-)
--other accounts receivable (+)
III. Contingent short-term net drains on foreign currency assets (nominal value)
Maturity breakdown (residual maturity, where applicable)
Total
Up to 1 month
More than 1 and up to 3 months
More than 3 months and up to 1 year
1. Contingent liabilities in foreign currency
(a) Collateral guarantees on debt falling due within 1 year
(b) Other contingent liabilities
2. Foreign currency securities issued with embedded options (puttable bonds)
3. Undrawn, unconditional credit lines provided by:
(a) other national monetary authorities, BIS, IMF, and other
international organizations
--other national monetary authorities (+)
--BIS (+)
--IMF (+)
(b) with banks and other financial institutions headquartered in the
reporting country (+)
(c) with banks and other financial institutions headquartered outside
the reporting country (+)
Undrawn, unconditional credit lines provided to:
(a) other national monetary authorities, BIS, IMF, and other
international organizations
--other national monetary authorities (-)
--BIS (-)
--IMF (-)
(b) banks and other financial institutions headquartered in reporting
country (- )
(c) banks and other financial institutions headquartered outside the
reporting country ( - )
4. Aggregate short and long positions of options in foreign currencies
vis-a-vis the domestic currency
(a) Short positions
(i) Bought puts
(ii) Written calls
(b) Long positions
(i) Bought calls
(ii) Written puts
PRO MEMORIA: In-the-money options 11 [
http://www.imf.org/external/np/sta/ir/usa/eng/curusa.htm#11 ]
(1) At current exchange rate
(a) Short position
(b) Long position
(2) + 5 % (depreciation of 5%)
(a) Short position
(b) Long position
(3) - 5 % (appreciation of 5%)
(a) Short position
(b) Long position
(4) +10 % (depreciation of 10%)
(a) Short position
(b) Long position
(5) - 10 % (appreciation of 10%)
(a) Short position
(b) Long position
(6) Other (specify)
(a) Short position
(b) Long position
IV. Memo items
(1) To be reported with standard periodicity and timeliness: [
http://www.imf.org/external/np/sta/ir/usa/eng/curusa.htm#12 ]
(a) short-term domestic currency debt indexed to the exchange rate
(b) financial instruments denominated in foreign currency and settled
by other means (e.g., in domestic currency) [
http://www.imf.org/external/np/sta/ir/usa/eng/curusa.htm#13 ]
--nondeliverable forwards
--short positions
--long positions
--other instruments
(c) pledged assets [
http://www.imf.org/external/np/sta/ir/usa/eng/curusa.htm#14 ]
--included in reserve assets
--included in other foreign currency assets
(d) securities lent and on repo [
http://www.imf.org/external/np/sta/ir/usa/eng/curusa.htm#15 ]
7,919
--lent or repoed and included in Section I
--lent or repoed but not included in Section I
--borrowed or acquired and included in Section I
--borrowed or acquired but not included in Section I
7,919
(e) financial derivative assets (net, marked to market)
--forwards
--futures
--swaps
--options
--other
(f) derivatives (forward, futures, or options contracts) that have a
residual maturity greater than one year, which are subject to margin
calls.
--aggregate short and long positions in forwards and futures in
foreign currencies vis-a-vis the domestic currency (including the
forward leg of currency swaps)
(a) short positions ( - )
(b) long positions (+)
--aggregate short and long positions of options in foreign currencies
vis-a-vis the domestic currency
(a) short positions
(i) bought puts
(ii) written calls
(b) long positions
(i) bought calls
(ii) written puts
(2) To be disclosed less frequently:
(a) currency composition of reserves (by groups of currencies)
76,580
--currencies in SDR basket
76,580
2--currencies not in SDR basket
--by individual currencies (optional)
*Notes:*
1/ Includes holdings of the Treasury's Exchange Stabilization Fund
(ESF) and the Federal Reserve's System Open Market Account (SOMA),
valued at current market exchange rates. Foreign currency holdings
listed as securities reflect marked-to-market values, and deposits
reflect carrying values.
2/ The items, "2. IMF Reserve Position" and "3. Special Drawing Rights
(SDRs)," are based on data provided by the IMF and are valued in
dollar terms at the official SDR/dollar exchange rate for the
reporting date. The entries for the latest week reflect any necessary
adjustments, including revaluation, by the U.S. Treasury to IMF data
for the prior month end.
3/ Gold stock is valued monthly at $42.2222 per fine troy ounce.
4/ The short positions reflect foreign exchange acquired under
reciprocal currency arrangements with certain foreign central banks.
The foreign exchange acquired is not included in Section I, "official
reserve assets and other foreign currency assets," of the template for
reporting international reserves. However, it is included in the
broader balance of payments presentation as "U.S. Government assets,
other than official reserve assets/U.S. foreign currency holdings and
U.S. short-term assets."
Message: 44 From: U.S. Department of the Treasury
<subscriptions@subscriptions.treas.gov> Date: Thu, 22 Jan 2009
15:40:13 -0600 (CST) Subject: Treasury Provides TARP Funds to Local
Banks
Treasury Provides TARP Funds to Local Banks [
http://www.treas.gov/press/releases/ts01.htm ]
"To view or print the PDF content on this page, download the free
Adobe(R) Acrobat(R) Reader(R) [
http://www.adobe.com/products/acrobat/readstep.html ]."
January 22, 2009
ts-01
*Treasury Provides TARP Funds to Local Banks*
*Washington*- The U.S. Treasury Department announced details this week
of a $1.5 billion investment in 39 banks made through its Capital
Purchase Program.
Treasury created the Capital Purchase Program, a part of the Troubled
Asset Relief Program, to help to stabilize and strengthen the U.S.
financial system. Treasury allocated $250 billion under TARP's Capital
Purchase Program to invest in U.S. financial institutions. To date,
the Department has made $193.8 billion of investments, receiving
preferred stock and warrants from participating institutions.
Investments have ranged from as small as $1 million to as large as $25
billion, financing community banking and Community Development
Financial Institutions in 43 states and Puerto Rico.
Institutions that sell shares to the government must comply with
restrictions on executive compensation [
http://www.treas.gov/press/releases/hp1208.htm ] during the period
that Treasury holds equity issued through this program and agree to
limitations on dividends and stock repurchases. Information about
Treasury's Troubled Asset Relief Program can be found at
http://www.treas.gov/initiatives/eesa/.
*Name of Institution*
*City and State*
* Price Paid*
Home Bancshares, Inc.
Conway, AR
$50,000,000
Washington Banking Company/
Whidbey Island Bank
Oak Harbor, WA
$26,380,000
New Hampshire Thrift Bancshares, Inc.
Newport, NH
$10,000,000
Bar Harbor Bankshares/Bar Harbor Bank & Trust
Bar Harbor, ME
$18,751,000
Somerset Hills Bancorp
Bernardsville, NJ
$7,414,000
SCBT Financial Corporation
Columbia, SC
$64,779,000
S&T Bancorp
Indiana, PA
$108,676,000
ECB Bancorp, Inc./East Carolina Bank
Engelhard, NC
$17,949,000
First BanCorp
San Juan, PR
$400,000,000
Texas Capital Bancshares, Inc.
Dallas, TX
$75,000,000
Yadkin Valley Financial Corporation
Elkin, NC
$36,000,000
Carver Bancorp, Inc
New York, NY
$18,980,000
Citizens & Northern Corporation
Wellsboro, PA
$26,440,000
MainSource Financial Group, Inc.
Greensburg, IN
$57,000,000
MetroCorp Bancshares, Inc.
Houston, TX
$45,000,000
United Bancorp, Inc.
Tecumseh, MI
$20,600,000
Old Second Bancorp, Inc.
Aurora, IL
$73,000,000
Pulaski Financial Corp
Creve Coeur, MO
$32,538,000
OceanFirst Financial Corp.
Toms River, NJ
$38,263,000
Community 1st Bank
Roseville, CA
$2,550,000
TCB Holding Company, Texas Community Bank
The Woodlands, TX
$11,730,000
Centra Financial Holdings, Inc./Centra Bank, Inc.
Morgantown, WV
$15,000,000
First Bankers Trustshares, Inc.
Quincy, IL
$10,000,000
Pacific Coast National Bancorp
San Clemente, CA
$4,120,000
Community Bank of the Bay
Oakland , CA
$1,747,000
Redwood Capital Bancorp
Eureka, CA
$3,800,000
Syringa Bancorp
Boise, ID
$8,000,000
Idaho Bancorp
Boise, ID
$6,900,000
Puget Sound Bank
Bellevue, WA
$4,500,000
United Financial Banking Companies, Inc.
Vienna, VA
$5,658,000
Dickinson Financial Corporation II
Kansas City, MO
$146,053,000
The Baraboo Bancorporation
Baraboo, WI
$20,749,000
Bank of Commerce
Charlotte, NC
$3,000,000
State Bankshares, Inc.
Fargo, ND
$50,000,000
BNCCORP, Inc.
Bismarck, ND
$20,093,000
First Manitowoc Bancorp, Inc.
Manitowoc, WI
$12,000,000
Southern Bancorp, Inc.
Arkadelphia, AR
$11,000,000
Morrill Bancshares, Inc.
Merriam, KS
$13,000,000
Treaty Oak Bancorp, Inc.
Austin, TX
$3,268,000
* -30-*
*REPORTS*
* Chart [ http://www.treas.gov/press/releases/reports/012209cpptablets01.pdf ]
Message: 45 From: U.S. Department of the Treasury
<subscriptions@subscriptions.treas.gov> Date: Fri, 23 Jan 2009
16:20:05 -0600 (CST) Subject: Treasury Department Public Engagements
Schedule
Treasury Department Public Engagements Schedule [
http://www.treas.gov/press/schedule.html ]
January 23, 2009
PublicSchedule
*Public Schedule*
*FOR THE WEEK OF January 23 - January 30, 2009*
*THERE ARE CURRENTLY NO PUBLIC ENGAGEMENTS SCHEDULED
*
Message: 46 From: U.S. Department of the Treasury
<subscriptions@subscriptions.treas.gov> Date: Mon, 26 Jan 2009
08:03:18 -0600 (CST) Subject: U.S. Department of the Treasury
Antiques, Art, Jewelry, & Collectibles (IRS) Update
You are subscribed to Antiques, Art, Jewelry, & Collectibles (IRS) for
U.S. Department of the Treasury. This information has recently been
updated, and is now available [
http://service.govdelivery.com/service/view.html?code=USTREAS_15 ].
Message: 47 From: U.S. Department of the Treasury
<subscriptions@subscriptions.treas.gov> Date: Mon, 26 Jan 2009
19:01:42 -0600 (CST) Subject: Remarks of Secretary Timothy Geithner
Swearing-In Ceremony January 26, 2009
Remarks of Secretary Timothy Geithner Swearing-In Ceremony January 26,
2009 [ http://www.treas.gov/press/releases/tg01.htm ]
January 26, 2009
TG-01
*Remarks of Secretary Timothy Geithner
Swearing-In Ceremony
January 26, 2009*
Thank you Mr. President.
Thank you Mr. Vice President.
And thanks to my many friends and colleagues for being here this evening.
My wife, Carole, stood beside me as I took this oath of office, as she
has before in this building. I want to thank her for extraordinary
grace and support. She has a remarkable capacity for calm wisdom and
empathy. Our children Elise and Benjamin are back at school in New
York doing their mid term exams. I miss them and am proud of them.
I am very pleased that my father, Peter Geithner, and my brother David
are here, representing my terrific family. My father gave me, among
many wonderful things, the important gift of showing me the world as a
child. He took us to live in Zambia and Rhodesia, then to India and
Thailand, and from those places I saw America through the eyes of
others. It was that experience -- seeing first hand the extraordinary
influence of American policy on the world -- that led me to work in
government.
I first walked into this building about 20 years ago.
I had at Treasury the wonderful experience of working with smart and
dedicated people working for their country, with the shared goal of
making government more effective, improving the results produced by
policy, in an environment where our obligation was to debate the
merits, to do what was right not what was expedient, drawing on the
best ideas and expertise.
Treasury's tradition is to defend the integrity of policy, to respect
the constraints imposed by limited resources, and to limit government
intervention to where it is essential to protect our financial system
and improve the lives of the American people.
That tradition is important today, but because it is that tradition of
credibility that makes it possible for governments to do what is
necessary to resolve a crisis. In the world we confront today,
Treasury has to be a source of initiative, not just a reminder of the
constraints of reality.
We are at a moment of maximum challenge for our economy and our country.
Our agenda is to move quickly to help you do what the country asked you to do.
To launch the programs that will bring economic recovery sooner, to
make our economy more productive, to restore trust in our financial
system with fundamental reform, to make our tax system better at
rewarding work and investment, more fair and more simple.
And to restore confidence in America's economic leadership around the world
I pledge all of my ability to help you meet that challenge and to
restore to all Americans the promise of a better future.
Mr. President, I am deeply grateful for your trust and confidence.
We will work our hearts out for you.
Thank you for giving me this great privilege of working for you.
-30-
Message: 48 From: U.S. Department of the Treasury
<subscriptions@subscriptions.treas.gov> Date: Tue, 27 Jan 2009
15:20:15 -0600 (CST) Subject: Treasury Provides Funding to Bolster
Healthy, Local Banks
Treasury Provides Funding to Bolster Healthy, Local Banks [
http://www.treas.gov/press/releases/tg03.htm ]
"To view or print the PDF content on this page, download the free
Adobe(R) Acrobat(R) Reader(R) [
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January 27, 2009
tg-03
*Treasury Provides Funding to Bolster Healthy, Local Banks*
*"Capital Purchase Program Funds 23 Banks
"**"to Help Meet Lending Needs of Local Consumers, Businesses"*
*Washington**, DC* - The U.S. Treasury Department today announced
investments of approximately $386 million in 23 banks across the
nation as part of its Capital Purchase Program (CPP), a means to
directly infuse capital into healthy, viable banks with the goal of
increasing the flow of financing available to small businesses and
consumers. *With additional capital, banks *are better able to meet
the lending needs of their customers, and businesses have greater
access to the credit that they need to keep operating and growing.
Since its inception in October 2008, Treasury has strengthened
regional, small and large financial institutions as well as Community
Development Financial Institutions through total CPP investments of
$194.2 billion in 317 institutions in 43 states and Puerto Rico. To
date, the largest investment was $25 billion and the smallest
investment was approximately $1 million.
Among the most recent banks to receive Treasury funding through the
CPP is the United Labor Bank, which provides cash management services
to unions, multi-family lending and small commercial real estate loans
throughout California.
"With the addition of this capital, we will expand our branch network
from five branches to seven or eight in the Pacific Northwest. We also
plan to expand our lending platform with the addition of residential
loan products. Our lending goals for the 2009 business year will
exceed $50 million of new loan growth," said Malcolm Hotchkiss,
President and Chief Executive Officer, First ULB Corp and United Labor
Bank.
Under the CPP, Treasury is purchasing up to a total of $250 billion of
senior preferred shares from viable U.S. financial institutions such
as those announced today. Institutions that participate in the CPP
must comply with restrictions on executive compensation during the
period that Treasury holds equity issued through the CPP and agree to
limitations on dividends and stock repurchases. Banks participating in
the CPP will pay the Treasury a five percent dividend on senior
preferred shares for the first five years following the investment and
a rate of nine percent per year thereafter. Banks may repay Treasury
under the conditions established in the purchase agreements, and
Treasury may sell these shares when market conditions stabilize.
Further information about the terms of the program, including weekly
transactions, can be found at http://www.treas.gov/initiatives/eesa/ [
http://www.treas.govhttp://www.treas.gov/initiatives/eesa/ ].
The following is a complete list of banks receiving funding on January 23, 2009:
*Arkansas** *
**
Liberty Bancshares, Inc.
$57,500,000
*California** *
California Oaks State Bank
$3,300,000
Calwest Bancorp/South County Bank
$4,656,000
Commonwealth Business Bank
$7,701,000
First ULB Corp.
$4,900,000
Fresno First Bank
$1,968,000
*Delaware** *
WSFS Financial Corporation
$52,625,000
*Florida** *
Alarion Financial Services, Inc.
$6,514,000
Seaside National Bank & Trust
$5,677,000
*Illinois** *
Midland States Bancorp, Inc.
$10,189,000
Princeton National Bancorp, Inc.
$25,083,000
Southern Illinois Bancorp, Inc.
$5,000,000
*Indiana** *
1st Source Corporation
$111,000,000
*Louisiana** *
FPB Financial Corp
$3,240,000
*Minnesota** *
Crosstown Holding Company/21st Century Bank
$10,650,000
*Missouri** *
Calvert Financial Corporation
$1,037,000
*Mississippi** *
BankFirst Capital Corporation
$15,500,000
*North Carolina** *
AB&T Financial Corporatiolliance Bank & Trust Company
$3,500,000
*Ohio** *
First Citizens Banc Corp
$23,184,000
*Pennsylvania** *
Stonebridge Financial Corp.
$10,973,000
*Tennessee** *
Moscow Bancshares, Inc.
$6,216,000
*Virginia** *
Farmers Bank
$8,752,000
*Washington** *
Pierce County Bancorp
$6,800,000
###
*REPORTS*
* Transaction REport (1/27/2009) [
http://www.treas.gov/press/releases/reports/transactionrpt012709.pdf ]
Message: 49 From: U.S. Department of the Treasury
<subscriptions@subscriptions.treas.gov> Date: Tue, 27 Jan 2009
15:40:08 -0600 (CST) Subject: U.S. International Reserve Position
U.S. International Reserve Position [
http://www.treas.gov/press/releases/200912716264612812.htm ]
January 27, 2009
2009-1-27-16-26-46-12812
*U.S. International Reserve Position*
The Treasury Department today released U.S. reserve assets data for
the latest week. As indicated in this table, U.S. reserve assets
totaled $75,857 million as of the end of that week, compared to
$76,580 million as of the end of the prior week.
I. Official reserve assets and other foreign currency assets
(approximate market value, in US millions)
January 23, 2009
A. Official reserve assets (in US millions unless otherwise specified) 1
Euro
Yen
Total
(1) Foreign currency reserves (in convertible foreign currencies)
75,857
(a) Securities
8,893
14,577
23,470
of which: issuer headquartered in reporting country but located abroad
0
(b) total currency and deposits with:
(i) other national central banks, BIS and IMF
10,231
7,135
17,366
ii) banks headquartered in the reporting country
0
of which: located abroad
0
(iii) banks headquartered outside the reporting country
0
of which: located in the reporting country
0
(2) IMF reserve position 2
7,422
(3) SDRs 2
9,023
(4) gold (including gold deposits and, if appropriate, gold swapped) 3
11,041
--volume in millions of fine troy ounces
261.499
(5) other reserve assets (specify)
7,536
--financial derivatives
--loans to nonbank nonresidents
--other (foreign currency assets invested through reverse repurchase agreements)
7,536
B. Other foreign currency assets (specify)
--securities not included in official reserve assets
--deposits not included in official reserve assets
--loans not included in official reserve assets
--financial derivatives not included in official reserve assets
--gold not included in official reserve assets
--other
II. Predetermined short-term net drains on foreign currency assets
(nominal value)
Maturity breakdown (residual maturity)
Total
Up to 1 month
More than 1 and up to 3 months
More than 3 months and up to 1 year
1. Foreign currency loans, securities, and deposits
--outflows (-)
Principal
Interest
--inflows (+)
Principal
Interest
2. Aggregate short and long positions in forwards and futures in
foreign currencies vis-a-vis the domestic currency (including the
forward leg of currency swaps)
(a) Short positions ( - ) 4
-465,322
-289,729
-175,593
(b) Long positions (+)
3. Other (specify)
--outflows related to repos (-)
--inflows related to reverse repos (+)
--trade credit (-)
--trade credit (+)
--other accounts payable (-)
--other accounts receivable (+)
III. Contingent short-term net drains on foreign currency assets (nominal value)
Maturity breakdown (residual maturity, where applicable)
Total
Up to 1 month
More than 1 and up to 3 months
More than 3 months and up to 1 year
1. Contingent liabilities in foreign currency
(a) Collateral guarantees on debt falling due within 1 year
(b) Other contingent liabilities
2. Foreign currency securities issued with embedded options (puttable bonds)
3. Undrawn, unconditional credit lines provided by:
(a) other national monetary authorities, BIS, IMF, and other
international organizations
--other national monetary authorities (+)
--BIS (+)
--IMF (+)
(b) with banks and other financial institutions headquartered in the
reporting country (+)
(c) with banks and other financial institutions headquartered outside
the reporting country (+)
Undrawn, unconditional credit lines provided to:
(a) other national monetary authorities, BIS, IMF, and other
international organizations
--other national monetary authorities (-)
--BIS (-)
--IMF (-)
(b) banks and other financial institutions headquartered in reporting
country (- )
(c) banks and other financial institutions headquartered outside the
reporting country ( - )
4. Aggregate short and long positions of options in foreign currencies
vis-a-vis the domestic currency
(a) Short positions
(i) Bought puts
(ii) Written calls
(b) Long positions
(i) Bought calls
(ii) Written puts
PRO MEMORIA: In-the-money options 11 [
http://www.imf.org/external/np/sta/ir/usa/eng/curusa.htm#11 ]
(1) At current exchange rate
(a) Short position
(b) Long position
(2) + 5 % (depreciation of 5%)
(a) Short position
(b) Long position
(3) - 5 % (appreciation of 5%)
(a) Short position
(b) Long position
(4) +10 % (depreciation of 10%)
(a) Short position
(b) Long position
(5) - 10 % (appreciation of 10%)
(a) Short position
(b) Long position
(6) Other (specify)
(a) Short position
(b) Long position
IV. Memo items
(1) To be reported with standard periodicity and timeliness: [
http://www.imf.org/external/np/sta/ir/usa/eng/curusa.htm#12 ]
(a) short-term domestic currency debt indexed to the exchange rate
(b) financial instruments denominated in foreign currency and settled
by other means (e.g., in domestic currency) [
http://www.imf.org/external/np/sta/ir/usa/eng/curusa.htm#13 ]
--nondeliverable forwards
--short positions
--long positions
--other instruments
(c) pledged assets [
http://www.imf.org/external/np/sta/ir/usa/eng/curusa.htm#14 ]
--included in reserve assets
--included in other foreign currency assets
(d) securities lent and on repo [
http://www.imf.org/external/np/sta/ir/usa/eng/curusa.htm#15 ]
7,687
--lent or repoed and included in Section I
--lent or repoed but not included in Section I
--borrowed or acquired and included in Section I
--borrowed or acquired but not included in Section I
7,687
(e) financial derivative assets (net, marked to market)
--forwards
--futures
--swaps
--options
--other
(f) derivatives (forward, futures, or options contracts) that have a
residual maturity greater than one year, which are subject to margin
calls.
--aggregate short and long positions in forwards and futures in
foreign currencies vis-a-vis the domestic currency (including the
forward leg of currency swaps)
(a) short positions ( - )
(b) long positions (+)
--aggregate short and long positions of options in foreign currencies
vis-a-vis the domestic currency
(a) short positions
(i) bought puts
(ii) written calls
(b) long positions
(i) bought calls
(ii) written puts
(2) To be disclosed less frequently:
(a) currency composition of reserves (by groups of currencies)
75,857
--currencies in SDR basket
75,857
2--currencies not in SDR basket
--by individual currencies (optional)
*Notes:*
1/ Includes holdings of the Treasury's Exchange Stabilization Fund
(ESF) and the Federal Reserve's System Open Market Account (SOMA),
valued at current market exchange rates. Foreign currency holdings
listed as securities reflect marked-to-market values, and deposits
reflect carrying values.
2/ The items, "2. IMF Reserve Position" and "3. Special Drawing Rights
(SDRs)," are based on data provided by the IMF and are valued in
dollar terms at the official SDR/dollar exchange rate for the
reporting date. The entries for the latest week reflect any necessary
adjustments, including revaluation, by the U.S. Treasury to IMF data
for the prior month end.
3/ Gold stock is valued monthly at $42.2222 per fine troy ounce.
4/ The short positions reflect foreign exchange acquired under
reciprocal currency arrangements with certain foreign central banks.
The foreign exchange acquired is not included in Section I, "official
reserve assets and other foreign currency assets," of the template for
reporting international reserves. However, it is included in the
broader balance of payments presentation as "U.S. Government assets,
other than official reserve assets/U.S. foreign currency holdings and
U.S. short-term assets."
Message: 50 From: U.S. Department of the Treasury
<subscriptions@subscriptions.treas.gov> Date: Wed, 28 Jan 2009
13:20:25 -0600 (CST) Subject: Treasury Announces New Policy To
Increase Transparency in Financial Stability Program
Treasury Announces New Policy To Increase Transparency in Financial
Stability Program [ http://www.treas.gov/press/releases/tg04.htm ]
January 28, 2009
TG-04
*Treasury Announces New Policy
To Increase Transparency in Financial Stability
Program*
*""*
*"Secretary Geithner Meets with Outside Experts to Discuss Oversight
of Troubled Assets Relief Program and Efforts to Increase Transparency
and Accountability
"*
*Washington, DC* - Building on President Barack Obama and Secretary
Tim Geithner's commitment to increase transparency and accountability
in the Troubled Assets Relief Program (TARP), the U.S. Department of
the Treasury today announced a new policy of posting investment
contracts for future completed transactions to the Department's
website within five to 10 business days.
For contracts already completed, documents will be posted on a rolling
basis, beginning today with the first nine contracts completed under
the Capital Purchase Program (CPP), as well as contracts for
transactions closed under the Systemically Significant Failing
Institutions (SSFI) program, the Targeted Investment Program (TIP) and
the Automotive Industry Financing Program (AIFP). Treasury will work
in the coming weeks to make public all copies of existing investment
agreements.
Confidential and proprietary information will be redacted from the
publicly posted documents at the request of the individual
institutions.
"In the coming weeks, we will unveil a series of reforms to help
stabilize the nation's financial system and get credit flowing again
to families and businesses. Included in those reforms will be a
commitment to increase transparency and oversight," said Secretary
Geithner. "Today, we are taking a step toward increased transparency
by committing to place all of our TARP investment agreements on the
Internet so that taxpayers can see how their money is being spent and
the terms these institutions must agree to before we invest taxpayer
money."
As part of his efforts to reform the TARP, Secretary Geithner today
met with individuals charged with providing outside oversight of the
program to review efforts taken to date to improve transparency and
accountability. Participants included Gene Dodaro, Acting Comptroller
General of the Government Accountability Office; Neil Barofsky, TARP
Special Inspector General; and Congressional Oversight Panel members
Elizabeth Warren, Damon Silvers, Richard Neiman, Rep. Jeb Hensarling
and Sen. John Sununu.
Treasury posted the following contracts today to
http://www.treas.gov/initiatives/eesa/agreements/index.shtml:
*Capital Purchase Program *
Bank of America
The Goldman Sachs Group
Morgan Stanley
Citigroup
JPMorgan Chase
Wells Fargo & Co.
Bank of New York Mellon
State Street
Merrill Lynch
*Targeted Investment Program
*Citigroup
*Systematically Significant Failing Institutions
*AIG
*Automotive Industry Financing Program *
GM
GMAC
Chrysler
###
Message: 51 From: U.S. Department of the Treasury
<subscriptions@subscriptions.treas.gov> Date: Wed, 28 Jan 2009
14:20:14 -0600 (CST) Subject: Treasury Designates Two Colombian
Companies
Treasury Designates Two Colombian Companies [
http://www.treas.gov/press/releases/tg05.htm ]
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Adobe(R) Acrobat(R) Reader(R) [
http://www.adobe.com/products/acrobat/readstep.html ]."
January 28, 2009
TG-05
*Treasury Designates Two Colombian Companies*
The U.S. Department of the Treasury's Office of Foreign Assets Control
(OFAC) today designated two Colombian companies, "Aquilea S.A." and
"Megaplast S.A.", as Specially Designated Narcotics Traffickers
(SDNTs) pursuant to Executive Order 12978. These two companies are
controlled by previously designated family members of drug kingpins
Miguel Rodriguez Orejuela and Gilberto Rodriguez Orejuela, who once
led the Cali drug cartel.
"Thanks to Colombian and U.S. efforts, the heads of the Cali cartel
today sit in jail and their family members have agreed to forfeit over
$2 billion in tainted assets to the relevant authorities," said OFAC
Director Adam J. Szubin. "Today's designation exposes two additional
companies that had been hidden by Rodriguez Orejuela family members
and are now subject to sanctions."
"Aquilea S.A.", which is located in Cali, Colombia, owns
pharmaceutical patents and trademarks. This company is controlled by
Amparo Rodriguez Orejuela and her daughter, Angela Maria Gil
Rodriguez, who were designated in 1995 and 2003, respectively. Amparo
Rodriguez Orejuela is the sister of SDNT principals Miguel and
Gilberto Rodriguez Orejuela.
"Megaplast S.A.", which is located in Palmira, Valle, Colombia, is a
manufacturer of plastic bags. This company is controlled by Humberto
Rodriguez Mondragon and Jaime Rodriguez Mondragon, who were both
designated in 1995 and are the sons of SDNT principal Gilberto
Rodriguez Orejuela.
In 2006, Miguel and Gilberto Rodriguez Orejuela pleaded guilty to drug
trafficking charges in the U.S. District Court for the Southern
District of Florida and money laundering charges in the U.S. District
Court for the Southern District of New York. These guilty pleas
resulted in 30-year prison sentences for each brother.
In connection with Miguel and Gilberto Rodriguez Orejuelas' guilty
pleas, 28 of their family members who were previously designated as
SDNTs entered into an agreement with the U.S. Department of Justice
and the U.S. Department of the Treasury in September 2006. As part of
this agreement, the 28 family members were obligated to identify all
"forfeitable property" financed in whole or in part with narcotics
proceeds and to identify all other assets of any nature whatsoever
that are owned or controlled by any family member who is a party to
the agreement. In exchange, the U.S. Government agreed to remove the
family members from the list of SDNTs after certain conditions,
including final forfeiture and/or divestiture of all forfeitable
property under the agreement, were met.
Amparo Rodriguez Orejeula, Angela Maria Gil Rodriguez, Humberto
Rodriguez Mondragon, and Jaime Rodriguez Mondragon are all parties to
this agreement. Although these four individuals controlled "Aquilea
S.A." and "Megaplast S.A." at the time of the agreement, they did not
identify these entities under the agreement. OFAC has notified the
four family members of this material omission and will evaluate their
response.
This designation is part of the ongoing interagency effort by the
Departments of the Treasury, Justice, State and Homeland Security to
implement Executive Order 12978 of October 21, 1995, which applies
financial sanctions against Colombia's drug cartels. Today's
designation action freezes any assets the designated entities may have
that are subject to U.S. jurisdiction and prohibits all financial and
commercial transactions by any U.S. person with those entities.
A detailed look at the program against Colombian drug organizations is
provided in OFAC's March 2007 "Impact Report on Economic Sanctions
Against Colombian Drug Cartels."
http://www.treas.gov/offices/enforcement/ofac/reports/narco_impact_report_05042007.pdf
Chart: "Designation of Rodriguez Orejuela Companies - January 2009"
*REPORTS*
* Designation of Rodriguez Orejuela Companies [
http://www.treas.gov/press/releases/reports/sdnt 39 chart v5.pdf ]
Message: 52 From: U.S. Department of the Treasury
<subscriptions@subscriptions.treas.gov> Date: Fri, 30 Jan 2009
16:40:09 -0600 (CST) Subject: Treasury Department Public Engagements
Schedule
Treasury Department Public Engagements Schedule [
http://www.treas.gov/press/schedule.html ]
January 30, 2009
PublicSchedule
*Public Schedule*
*FOR THE WEEK OF FEBRUARY 2--FEBRUARY 6, 2009*
**Wednesday, February 4, 2009, 10:00 a.m. EST
*Acting Assistant Secretary for Financial Markets Karthik Ramanathan
Quarterly Refunding Webcast and Press Conference
Treasury Department
Media Room (4121)
1500 Pennsylvania Avenue, NW
Washington, D.C.
Note: Media without Treasury press credentials should contact Frances
Anderson at (202) 622-2960 or frances.anderson@do.treas.gov with the
following information: full name, Social Security number, and date of
birth.
###
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Director of The United States Department of Human Services; Defendant
Article IV General Provisions Section 2
(Supreme Law of The Land) The Constitution of The United States "Any thing
in The Constitution or Laws of any State to the Contrary Notwithstanding"
Contrary to Law (of an act or omission) illegal;
https://twitter.com/presidentus1
--
President of The United States
Guy Ralph Perea Sr President of The United States
Weatherdata1046am0426 a Discussion Group of
Weatherdata<http://groups.google.com/group/weatherdata1046am0426>
USFMSC
http://www.cityfreq.com/ca/avalon/>
QUALIFY QICP
OCCUPS
http://www.occupationalinfo.org/02/025062010.html
goldlandabstracts; link check
own search engine - The United
States International Policies
http://apps.facebook.com/faceblogged/?uid=1340855784
http://lnk.ms/8d5gl aol
http://groups.google.com/group/united-states-of-american
http://twitter.com/ptusss Federal Communication
Commission<http://columbiabroadcast.spaces.live.com/>
Ambassador Chevy Chase; Kevin Corcran; Jack Nickolas; Cher; Shirley Temple
Black; Liza Minnille; Ansari; Ernest Tascoe; Food, Drug and Cosmetic Act
Agent Jodie Foster; Department of Veterans Affairs Director George H.W. Bush
Title 22 USCS section 1928 (b) The e-mail
transmission may contain legally privileged information that
is intended only for the individual or entity recipient, you are hereby,
notified that any disclosure, copying, distribution, or reliance upon the
contents of this E-mail is strictly prohibited. If you have received this
E-mail transmission in error, please reply to the sender, so arrangements
can be made for proper delivery. Title 42
USCS section 192 etseq Margie Paxton Chief of Childrens Bureau
Director of The United States Department of Human Services; Defendant
Article IV General Provisions Section 2
(Supreme Law of The Land) The Constitution of The United States "Any thing
in The Constitution or Laws of any State to the Contrary Notwithstanding"
Contrary to Law (of an act or omission) illegal;
https://twitter.com/presidentus1
--
President of The United States
Guy Ralph Perea Sr President of The United States
Weatherdata1046am0426 a Discussion Group of
Weatherdata<http://groups.google.com/group/weatherdata1046am0426>
USFMSC
http://www.cityfreq.com/ca/avalon/>
QUALIFY QICP
OCCUPS
http://www.occupationalinfo.org/02/025062010.html
goldlandabstracts; link check
own search engine - The United
States International Policies
http://apps.facebook.com/faceblogged/?uid=1340855784
http://lnk.ms/8d5gl aol
http://groups.google.com/group/united-states-of-american
http://twitter.com/ptusss Federal Communication
Commission<http://columbiabroadcast.spaces.live.com/>
Ambassador Chevy Chase; Kevin Corcran; Jack Nickolas; Cher; Shirley Temple
Black; Liza Minnille; Ansari; Ernest Tascoe; Food, Drug and Cosmetic Act
Agent Jodie Foster; Department of Veterans Affairs Director George H.W. Bush
Title 22 USCS section 1928 (b) The e-mail
transmission may contain legally privileged information that
is intended only for the individual or entity recipient, you are hereby,
notified that any disclosure, copying, distribution, or reliance upon the
contents of this E-mail is strictly prohibited. If you have received this
E-mail transmission in error, please reply to the sender, so arrangements
can be made for proper delivery. Title 42
USCS section 192 etseq Margie Paxton Chief of Childrens Bureau
Director of The United States Department of Human Services; Defendant
Article IV General Provisions Section 2
(Supreme Law of The Land) The Constitution of The United States "Any thing
in The Constitution or Laws of any State to the Contrary Notwithstanding"
Contrary to Law (of an act or omission) illegal;
https://twitter.com/presidentus1
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