[lbo-talk] How the key loophole got inscribed into the Paulson Plan by reference

Shane Taylor shane.taylor at verizon.net
Sat Oct 11 08:26:39 PDT 2008


Nouriel Roubini by way of Michael Pollak:


> In other terms it was necessary to explicitly clarify that
> the definition of "assets" or "any other financial
> instrument" in the legislation did allow for such public
> injection of capital so as to ensure that the regulations
> following the legislation would allow for such
> interpretation and actual practice. Since it was too late
> - by Wednesday last week -- to explicitly modify the
> legislation to allow for explicit wording on this matter
> and since Treasury was resisting such late explicit changes
> (that would have jolted the banking industry) the tool that
> was used (in full agreement with the House and Senate
> leadership) to allow for such interpretation was to have
> Representative Jim Moran use the October 3rd House floor
> debate right before the final vote to put on the legislative
> record such interpretation.

In other words, to smuggle the provision past the banking industry, they had to obscure it so no one found it before passage.

Shane



More information about the lbo-talk mailing list