Text size:

  • Small
  • Normal
  • Large

Key elements of the US bailout blueprint

The US$700 billion (Dh2.57 trillion) in buying power would be doled out by Congress in stages.

The US$700 billion (Dh2.57 trillion) in buying power would be doled out by Congress in stages. After the first $250bn is authorised, the president could request another $100bn. The final $350bn could be cleared by a further act of Congress. Eligible assets include residential or commercial mortgages and related instruments which were originated or issued on or before March 14, 2008. Other financial instruments can be included in consultation with the Federal Reserve if Congress is notified.

Treasury secretary given broad discretion to determine the methods for buying assets. Foreign central banks, or institutions owned by a foreign government, cannot take part. If a company receives aid but fails, the government will be one of the last investors to see a loss. A new congressional panel would have oversight power and the Treasury secretary would report regularly to lawmakers in two elements of a multilevel oversight apparatus.

If the Treasury takes a stake in a company, the top five executives would be subject to limits on their salaries. Executives hired after a financial company offloads more than $300m in assets via auction to the government will not be eligible for "golden parachutes". The federal government may stall foreclosure proceedings on home loans purchased under the plan. Alongside the plan to buy securities outright, the Treasury Department will conceive an alternative insurance programme that would underwrite troubled loans and would be paid for by participating companies.

If the government has taken losses five years into the programme, the Treasury Department will draft a plan to tax the companies that took part to recoup taxpayer losses. Would permit the Federal Reserve to begin paying interest on bank reserves from Oct 1, giving it another tool for easing credit strains. Mandates a study on the impact of mark-to-market accounting standards, which critics blame for a downwards spiral in the valuation of assets on corporate balance sheets.

The government will take a stake in companies that tap federal aid so that taxpayers can share in the profits if those companies get back on their feet. An exception applies to financial firms that offload less than $100 million of soured investments. * Reuters

Back to the top

More articles

Editor's Picks

 The Greens, villas: Q1 no change. 3BR - Dh210-250,000. 4BR - Dh210-260,000. 5BR - Dh220-300,000. Q1 2013-Q1 2014 5% rise. Pawan Singh / The National

In pictures: Where Dubai rents have risen and fallen, Q1 2014

Find out how rental prices in the prime locations in Dubai have altered during the first three months of the year and the current rates you will pay according to data provided by Asteco.

 Above, the private pool of Ocean Heights' five-bedroom penthouse flat. Courtesy Christie’s International Real Estate

In pictures: Penthouse flat is height of Dubai luxury living

A five-bedroom penthouse in Ocean Heights in Dubai Marina is on sale for Dh25 million and comes with a private pool and an unparalleled view of Dubai.

 The cooling towers of the Temelin nuclear power plant near the Tyn nad Vltavou in Czech Republic. The country wants to continue expanding nuclear energy capacity despite cancelling a tender to build two new units. David W Cerny / Reuters

In pictures: Best business images for the week to April 17, 2014

Here are some of the best business images for the week to April 17, 2014.

 Three generations of the Hakimi family tend to their stall Crawford Market in Mumbai. Subhash Sharma for The National

In pictures: Shopper’s delight at Crawford Market in Mumbai

Crawford Market is an old British-style covered market dealing in just about every kind of fresh food and domestic animal imaginable. Later on renamed Mahatma Jotirao Phule, the market remains popular among locals and visitors by its old name, taken from Arthur Crawford who was the first municipal commissioner of the city.

 The Wind, Energy, Technology and Environment Exhibition takes place from April 14 to April 16. Above, the Dewa showroom during last year’s Wetex. Jaime Puebla / The National

April corporate and economic calendar for the UAE and overseas

From Cityscape to Wetex to stock-market holidays to nations reporting first-quarter GDP figures, here is our helpful calendar of April's business events in the UAE and internationally.

 Get the latest information on credit cards, bank accounts and loan products in the UAE. Mark Lennihan / AP Photo

Rates report: Latest on UAE loans, accounts and credit cards

Souqamal.com brings you the latest interest rates on banking products in the UAE.


To add your event to The National listings, click here

Get the most from The National