Yesterday we puzzled over the mixed messages we were hearing from Obama officials over the veracity of a Washington Post report that it was using Enron-style “special purpose vehicles” to undermine executive pay restrictions on bailed out banks: senior adviser David Axelrod sheepishly defended the strategy on one Sunday talk show, while Tim Geithner denied it altogether on another. But newly-promoted House Oversight Chairman Ed Towns is getting to the bottom of it, reports the Post today, in a story that sheds some much-needed light on the conflicting stories: the strategy began with the Treasury Department’s $1 trillion consumer and business lending initiative, which is in part an expansion of the Federal Reserve’s Term Asset-Backed Securities Loan Facility, which is open to the American subsidiaries of foreign banks, which Treasury presumably wants to participate in the programs without having to deal with the added diplomatic headache of subjecting foreign bankers to rules designed to satisfy American voters. Unsurprisingly, not everyone in Congress is opposed to that.
This is a companion discussion topic for the original entry at https://talkingpointsmemo.com/?p=144052