Friday, June 05, 2009

TARP Nominee Says Program Needs $100 Billion Cushion

TARP Nominee Allison Sees 'Bump' Next Week in TARP Repayments; Bloomberg

Herb Allison, the Obama administration’s nominee to run the $700 billion financial- rescue, said the “roughly” $100 billion left in the program should be reserved for any unforeseen problem that requires more government intervention.

“It’s important that we leave some headroom in this program, because we’re not yet out of this crisis,” Allison told the Senate Banking Committee in his confirmation hearing today. “The Treasury and the government need some flexibility so that if there’s a need in the future we can intervene in a timely manner on behalf of the American public.”

President Barack Obama nominated Allison to be assistant Treasury secretary for financial stability, a job that includes overseeing the Troubled Asset Relief Program. He has been working at the Treasury since May 1 as a counselor to Secretary Timothy Geithner.

In contrast to the harsh questioning some lawmakers gave Neel Kashkari, who vacated the TARP post in May, Allison drew praise today from members of both parties. Senate Banking Committee Chairman Christopher Dodd, a Democrat from Connecticut, called Allison “a great choice” and said he would seek a vote on the nomination as soon as possible.

“He has kind of an interesting resume in terms of background he brings to this job,” Dodd said. “He’s highly respected.”

‘No Doubt’

Senator Bob Corker, a Republican from Tennessee, told Allison “you have stature and you have substance.” Senator Mark Warner, a Virginia Democrat, said in an interview with Bloomberg Television that he had “no doubt” Allison would be confirmed by the Senate.

Allison, the former chief executive officer of housing- finance company Fannie Mae, cautioned about overestimating the strength of the U.S. economic recovery. In his testimony, he cited some signs that credit markets are improving and other signals that show the financial system remains under stress.

Read the rest here.

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