It was supposed to be one of the central programs of the $700 billion bailout: The government would use up to $100 billion to help private investors buy up banks' troubled assets. But almost five months after Treasury Secretary Tim Geithner first announced the idea, it's still not off the ground.
There are a number of reasons, reports the Wall Street Journal. But the main one is simply that the big banks don't want to take losses if they don't have to, and their recent success in raising funds privately in the aftermath of the stress tests has taken the pressure off. There are a number of community and small regional banks with bad loans that would love to take part in the program, the Journal reports, but it was mainly designed for the largest banks; for instance, banks would have to offer a certain minimum of assets in order to participate. It's unclear when the program will finally get going.
Other links this morning:
How a Loophole Benefits General Electric in Bank Rescue (ProPublica, WaPo)
Paper Avalanche Buries Plan to Stem Foreclosures (NYT)
Fed Documents Fuel Concerns About Expanding Central Bank's Role (WSJ)
Treasury, GM Close to Reaching Deal on Legal Claims (WaPo)
Small Banks Not Shying From TARP (WSJ)