Making Sense of the Aggregator Bank
On Tuesday, 10 February 2009, Treasury Secretary Geithner proposed the aggregator bank (“public-private investment fund”) as a key instrument to resolve the financial crisis (www.financialstability.gov). The Treasury description leaves many issues unanswered. Here we explain how an aggregator bank might operate in practice. We fill in some of the major details so as to enhance the effectiveness of the aggregator bank. In particular, the approach emphasizes transparency and value to the taxpayer, minimizing the need for bank-by-bank negotiations and thereby minimizing the opportunities for the government to play favorites.
|Date of creation:||2009|
|Date of revision:||2009|
|Publication status:||Published in The Economists' Voice, 6:3, www.bepress.com/ev/vol6/iss3/art2, February 2009|
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