Treasury chief bailed Puts Out On Bank CEO rating

 

Tuesday, Apr 07,2009, 2:50:27 PM   Click:

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WASHINGTON_The Government May require new faces in the executive suites in banks require "exceptional" in the future, Treasury Secretary Timothy Geithner said Sunday.

Critics of the Obama administration to move the weekend of force by the president of General Motors Corp., Rick Wagoner, as an additional condition for possible federal loans that the strong state intervention in contrast with measures on the financial industry in return for billions in infusions.

Geithner was not there a double standard and to give notice to the banks in May that they need to change leadership teams in exchange for accepting more money in the future.

"If, in future, banks need exceptional assistance to get through this, we will then ensure that the aid is accompanied by conditions, not only to protect the taxpayer, but if ensure that it is the nature of the restructuring necessary for them to emerge stronger, "he told" Face the Nation "on CBS. "And that requires that a change of direction of the Board, we will do."

The Treasury chief said that what happened to a few large institutions that receive large amounts of government assistance. They include mortgage companies Fannie Mae and Freddie Mac, which were placed in conservatorship by the government last September, and insurer American International Group Inc, the beneficiary of over $ 170 billion in assistance since the fall last.

"We have already seen many of the largest banks in our country or not being absorbed by other institutions, no longer exists as independent institutions. And where the government has acted, as in Fannie and Freddie and AIG as in, where we 've had to do something exceptional to stabilize, we replaced the management and the board, "said Geithner.


"And we did because we want to ensure that taxpayers' assistance is underway to make these enterprises more strong, ensure that accountability, make sure it comes with a strong conditions. And we will do so in the future if necessary, "he added.

"This is a single standard, a single principle. And we have an obligation to the American people is to do what is necessary to try to put on track to recovery as quickly as possible. "

Asked if chief executives of major banks like Citibank and Bank of America should worry about their jobs if their companies do not improve their performance, Geithner said the government would not shy from such a restructuring .

"When necessary, if it meets the tests, where it is necessary to do what we are ... to do, which is to ensure that the system supports recovery banks and financial appear stronger, "said Geithner.

Under the new administration of the recasting of $ 700 billion bailout effort, the bank regulators require stress tests for the 19 largest banks to determine if they need additional support to resist a recession worse than the country now faces.

These tests are planned to be completed by the end of April. After that, banks need extra capital will be given time to carry it on their own.

If they are not able to do so, they will be provided with additional support from the rescue fund. But the administration said the additional support will come with more stringent requirements to ensure that banks use the money to increase lending to consumers and businesses.