A U.S. congressman says a number of bad loans already could have been moved off the books of the financial industry if there had been willing sellers, because a number of buyers, including community banks, have expressed interest in purchasing some of those assets.
The comments from Rep. Kevin Brady, R-Texas, came in an interview with Greg Corombos of Radio America.
The audio of the interview is available here:
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Brady was reacting to the plan announced today by Treasury Secretary Tim Geithner to help buy up the troubled assets of America’s banks – largely loans that aren’t being repaid and the property that was mortgaged.
The goal is to spur the nation’s economic recovery.
Brady was asked how optimistic Americans should be and how Geithner’s plan is different from the huge bailout approved last year.
The congressman said the trouble asset program announced today is “déjà vu all over again.”
He first wondered whether the program will be big enough, since it is targeting half a trillion dollars even though some estimates put the problem at $2 trillion. Then he wondered whether the help will be available only to big hedge funds and pension funds.
“It seems to me,” he said, “we’ve had a number of willing buyers … community banks, ready to step in.” But he said the big bank companies haven’t been willing to sell the problems at their value and were waiting for a “better deal” from the government.
Brady said that while the first round of Troubled Asset Relief Program funds were to be used for this same purpose, Treasury officials at that time were “scrambling” and just rushed the money out the door to capitalize the banks.
The banks then, instead of dealing with the problems, held the assets awaiting another deal, he said.
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