Geithner hints at fund to cover bank losses

Source: CNN/Reuters

Treasury Secretary says he will propose legislation to create a 'systemic risk fund' to insure against failures.

WASHINGTON (Reuters) -- Treasury Secretary Timothy Geithner said on Wednesday he will soon propose legislation to create a systemic risk fund that would be backed by large financial institutions and would cover losses if those companies were to fail.

"Our judgment is that it needs to be a separate solution where the burden of funding ... (is) borne by the large institutions in a level proportionate to their size," he told a meeting of community bankers.


Read more: http://money.cnn.com/2009/05/13/news/economy/Geithner_banks.reut/index.htm

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YAY!!!!

i've been asking for this for ages!!!!

get the too-big-to-fail institutions to pay an insurance premium when they ARE making money so there's a fund to bail them out when they screw things up.

of course, this should apply to ALL too-big-to-fail institutions, not just in the financial sector, but it's a start....

I wonder if any in Congress could figure a way to utilize that "fund" in the interim, like Social Security Trust Fund?

I kinda thought that was what the "stress test" gift was, but apparently he's not done yet.