Kashkari: Bank bailout just beginning

Key Treasury official said it's too early to judge effectiveness of the capital injection plan and added that other options to help financials are on the table.

EMAIL  |   PRINT  |   SHARE  |   RSS
google my aol my msn my yahoo! netvibes
Paste this link into your favorite RSS desktop reader
See all CNNMoney.com RSS FEEDS (close)
By David Ellis, CNNMoney.com staff writer

Treasury's Neel Kashkari said his agency wasn't ruling out using government funds for companies outside the banking sector.

NEW YORK (CNNMoney.com) -- Neel Kashkari, the Treasury Department's point man for the bank bailout, said Friday he was encouraged by progress made thus far but acknowledged that more work lay ahead.

Speaking in New York City at a conference sponsored by the Wharton School of the University of Pennsylvania, Kashkari took on many of the tough questions that have surrounded the government's Troubled Asset Relief Program, or TARP, in recent weeks.

Among those were concerns about whether banks that sign up for government capital would in fact use the money for what it was originally intended - lending to consumers and business.

Kashkari noted that money has not even been released to many of the participating banks yet so that it was still too early to see the effect of the capital purchase program.

"The first piece isn't even out the door yet," he said.

There has also been talk in recent days that the program could be extended to insurance companies and other specialty financial firms as well as to companies in other sectors, most notably struggling automakers.

Kashkari indicated that everything was on the table.

"We are looking at everything," he said. "We are trying to figure out what will provide the most benefit to the financial system."

He added that his agency was not attempting to force consolidation in the nation's banking system by providing government funds to stronger banks and denying money to weaker ones. But he acknowledged that this would help bring life back to badly beaten sector.

"Prudent mergers and acquisitions can be very good for the financial system," he said.

Kashkari, a Goldman Sachs alumnus who was appointed interim assistant secretary for financial stability in early October shortly after President Bush signed the $700 billion rescue package into law, also said that his team would work to ensure a smooth transition for the new administration of President-elect Obama.

"The next team may have their own ideas," he said. "We have to make sure it is a smooth handoff." To top of page

They're hiring!These Fortune 100 employers have at least 350 openings each. What are they looking for in a new hire? More
If the Fortune 500 were a country...It would be the world's second-biggest economy. See how big companies' sales stack up against GDP over the past decade. More
Sponsored By:
More Galleries
10 of the most luxurious airline amenity kits When it comes to in-flight pampering, the amenity kits offered by these 10 airlines are the ultimate in luxury More
7 startups that want to improve your mental health From a text therapy platform to apps that push you reminders to breathe, these self-care startups offer help on a daily basis or in times of need. More
5 radical technologies that will change how you get to work From Uber's flying cars to the Hyperloop, these are some of the neatest transportation concepts in the works today. More

Most stock quote data provided by BATS. Market indices are shown in real time, except for the DJIA, which is delayed by two minutes. All times are ET. Disclaimer. Morningstar: © 2018 Morningstar, Inc. All Rights Reserved. Factset: FactSet Research Systems Inc. 2018. All rights reserved. Chicago Mercantile Association: Certain market data is the property of Chicago Mercantile Exchange Inc. and its licensors. All rights reserved. Dow Jones: The Dow Jones branded indices are proprietary to and are calculated, distributed and marketed by DJI Opco, a subsidiary of S&P Dow Jones Indices LLC and have been licensed for use to S&P Opco, LLC and CNN. Standard & Poor's and S&P are registered trademarks of Standard & Poor's Financial Services LLC and Dow Jones is a registered trademark of Dow Jones Trademark Holdings LLC. All content of the Dow Jones branded indices © S&P Dow Jones Indices LLC 2018 and/or its affiliates.