LyinDan
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3/24/2009 3:27:24 PM
Die, Corps, DIE!!!
WASHINGTON — Treasury Secretary Timothy Geithner called on Congress Tuesday to grant him new powers to regulate huge financial companies like insurance giant AIG, whose failure would pose a grave danger to the U.S. financial system and the broader economy.
Specifically, Geithner wants powers similar to those of the Federal Deposit Insurance Corporation, which has authority to seize control of banks, take over their bad assets and sell good ones to competitors.
"AIG highlights broad failures of our financial system," Geithner told the House Financial Services Committee. "We must ensure that our country never faces this situation again."
Federal Reserve Chairman Ben Bernanke, appearing with Geithner, agreed. He said the government's bailout of troubled insurance giant American International Group Inc. underscores the urgent need to safely wind down financial giants on the verge of collapse and subject them to much stronger regulatory oversight.
Much of the discussion centered on ways to help the government better deal with future AIG-like companies whose failure could devastate the financial system and the drag down the economy.
Geithner made it clear he believes the treasury secretary should be granted unprecedented power, after consultation with Federal Reserve Board officials, to take control of a major financial institution and run it. The treasury chief is an official of the administration, unlike the FDIC, which is an independent regulatory agency.
Bernanke and Geithner were braced for a scolding before lawmakers over the handling of bonuses at American International Group Inc., which has become a symbol of reckless risk-taking on Wall Street.
For his part, the Fed chief said he wanted to sue to stop insurance giant AIG from paying millions in bonuses, but lawyers advised against doing so.
AIG is a globally interconnected colossus, with 74 million customers worldwide and operations in more than 130 countries. The government decided it was simply too big to let fail.
"Its failure could have resulted in a 1930s-style global financial and economic meltdown, with catastrophic implications for production, income and jobs," Bernanke told the panel.
As a result, the government has bailed out AIG four times, to the tune of more than $180 billion altogether. The company recently paid at least $165 million in bonuses to employees who worked in the financial products division that has been blamed for the its near-collapse. The bonuses came even as AIG reported a stunning $62 billion loss, the biggest in U.S. corporate history.
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Holo Lukaloa
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3/24/2009 3:56:36 PM
Drastic problems merit drastic measures to fix them. Want to talk about a government that was out of control? Well the last one actually tortured people, broke the Geneva Convention. Spied on its own citizens illegally, unconstitutionally. Threw innocent people in prison, took away their rights and didn't even give them a trial. Obliterated the law of habeus corpus. AND sent us to an unnecessary war that cost trillions and thousands of lives, under false pretenses and deliberate manipulation of intelligence info.
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