President Barack Obama, speaking on Wall Street Monday on the first anniversary of the crescendo of the financial crisis, will discuss the administration's plans "to wind down government involvement in the financial sector," will push for "immediate action" on regulatory changes need to prevent future crises and admonish Wall Street to avoid the practices that led to the crisis, an administration official said. The president's remarks, follow similar comments from the Treasury and Federal Reserve aimed at blunting criticism that they lack an "exit strategy" for withdrawing their support for the financial system with speeches and documents timed for the first anniversary of the worst moments of the crisis.
To bolster the case that it has an exit strategy, the Treasury on Monday is planning to issue a document titled "The Next Phase" that includes 33 pages of charts. Taking credit for "containing the panic," the report states, "We are moving from the rescue of our financial system to a period of stabilization, rehabilitation, and rebuilding," according to a copy viewed by The Wall Street Journal.
The report discloses no new policies, but describes ways in which lending under emergency initiatives -- Fed and Treasury support of money-market mutual funds, for instance -- is being reduced, both because of waning demand and by previously announced decisions to allow some to expire. It offers no clues to the administration's plans for restructuring mortgage giants Fannie Mae and Freddie Mac, which are now controlled by the government and dependent on continued infusions of taxpayer money.
In addition to offering details that will undergird the president's speech Monday, the Treasury report emphasizes two other themes that administration and Fed officials have sounded recently.
One is that the government remains prepared to act if the financial system stumbles again. "Although we are rolling back emergency support programs that are no longer needed, significant parts of the financial system remain impaired," it says. "It is prudent to maintain capacity to address unforeseen developments." The second is that the vulnerabilities in the financial regulatory system exposed by the crisis remain unaddressed by Congress. "We must not forget the lessons we have learned from this period," it says. "Rebuilding our regulatory system in a way that is strong and better-suited to manage risk and ensure safety and soundness must be our highest priority."
The audience for the president's speech will include members of Congress, Wall Street executives, Mr. Geithner and Christina Romer, who chairs the White House Council of Economic Advisers. Mr. Bernanke is scheduled to speak Tuesday at the Brookings Institution in Washington.
To bolster the case that it has an exit strategy, the Treasury on Monday is planning to issue a document titled "The Next Phase" that includes 33 pages of charts. Taking credit for "containing the panic," the report states, "We are moving from the rescue of our financial system to a period of stabilization, rehabilitation, and rebuilding," according to a copy viewed by The Wall Street Journal.
The report discloses no new policies, but describes ways in which lending under emergency initiatives -- Fed and Treasury support of money-market mutual funds, for instance -- is being reduced, both because of waning demand and by previously announced decisions to allow some to expire. It offers no clues to the administration's plans for restructuring mortgage giants Fannie Mae and Freddie Mac, which are now controlled by the government and dependent on continued infusions of taxpayer money.
In addition to offering details that will undergird the president's speech Monday, the Treasury report emphasizes two other themes that administration and Fed officials have sounded recently.
One is that the government remains prepared to act if the financial system stumbles again. "Although we are rolling back emergency support programs that are no longer needed, significant parts of the financial system remain impaired," it says. "It is prudent to maintain capacity to address unforeseen developments." The second is that the vulnerabilities in the financial regulatory system exposed by the crisis remain unaddressed by Congress. "We must not forget the lessons we have learned from this period," it says. "Rebuilding our regulatory system in a way that is strong and better-suited to manage risk and ensure safety and soundness must be our highest priority."
The audience for the president's speech will include members of Congress, Wall Street executives, Mr. Geithner and Christina Romer, who chairs the White House Council of Economic Advisers. Mr. Bernanke is scheduled to speak Tuesday at the Brookings Institution in Washington.
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