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May 7th, 2009
02:53 PM ET

Geithner: How We Tested the Big Banks

Editor's Note: Go here to see the 'Stress Test' results.

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Timothy Geithner
For The New York Times

This afternoon, Treasury, the Federal Deposit Insurance Corporation, the Office of the Comptroller of the Currency and the Federal Reserve will announce the results of an unprecedented review of the capital position of the nation’s largest banks. This will be an important step forward in President Obama’s program to help repair the financial system, restore the flow of credit and put our nation on the path to economic recovery.

The president came into office facing a deep recession and a damaged financial system. Credit had dried up, forcing businesses to lay off workers and defer investment. Families were finding it difficult to borrow to finance a new house, buy a car or pay college tuition. Without action to restore lending, we faced the prospect of a much deeper and longer recession.

President Obama confronted these problems with dramatic action to address the housing crisis and to restart credit markets that are responsible for roughly half of all business and consumer lending. The administration also initiated a program to provide a market for legacy loans and securities to help cleanse bank balance sheets. These programs are helping to repair lending channels that do not rely on banks, and will contribute to fixing the banking system itself.

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soundoff (4 Responses)
  1. JC- Los Angeles

    It's the height of hypocrisy and beyond the pale for Timothy Geithner to be taking such a didactic stance on how best to spend taxpayer money.

    Rather than qualifying what the banks or the automotive industry planned to do with all the money, Timothy simply dispensed the cash so banks could clean up their balance sheets and pay off their foreign partners while Chrysler could take the cash and then go bankrupt.

    Next, Timothy will focus on his Private/Public Investment Fund where he will attempt to get his Wall Street friends, the private portion of the plan, paid a second time on the same mortgage fraud that ruined us.

    You can't make this stuff up.

    May 7, 2009 at 7:25 pm |
  2. simon

    what i find ironic about this whole story,is that the federal reserve is owned by the same people who own bank of america chase bank city group,and more....
    they got us in to trubbel and them selves,but some how the goverment gavethem money to recover nad that same money was borowed from their other hand...so not only did they get the money....the goverment will olso being paying them intrest on that same money.....isnt ironic......dont you think????
    a littil to ironic...i really do think

    May 7, 2009 at 7:16 pm |
  3. Adachi

    Wow after reading the article about the president’s plans to aggressively secure Americas money I am very impressed. Ideally this plan will provide transparency Americans need to feel secure and this security will translate into consumer confidence so people will begin to spend wisely again.
    Great plan!!!!!!

    May 7, 2009 at 1:10 pm |
  4. meenas17

    Good work ,Obama. Addressing the credit system first, has helped the country. The cry no outsourcing to Bangalore, but job creation in Buffalo , is stupendous. A pat in your back .

    May 7, 2009 at 12:05 pm |