US Sen. Reid Commends Geithner For Public Warrant Auctions
By Meena Thiruvengadam, Of DOW JONES NEWSWIRES
WASHINGTON -(Dow Jones)- Despite facing criticism and calls for his
resignation in a Congressional hearing a day earlier, U.S. Treasury Secretary
Timothy Geithner got a little love from Capitol Hill on Friday.
Senate Majority Leader Harry Reid (D., Nev.) praised Geithner for moving to
auction a trio of warrant positions that the Treasury received from banks
participating in the Troubled Asset Relief Program.
"While I recognize that there is much work left to do and there remain many
challenges for those trying to access credit, Secretary Geithner and his team
should be commended for the work they have done to stabilize our financial
system and help pave the way for the economic recovery," Reid said.
Reid said he views Treasury's plan to auction warrants from J.P. Morgan Chase
& Co. (JPM), Capital One Financial Corp. (COF) and TCF Financial Corp. (TCB) as
a sign that market conditions have improved substantially in the past year.
Treasury plans to sell the warrants through modified Dutch auctions to be held
during the next month.
Treasury previously has sold its warrant positions through private
transactions with the banks that issued them, a method that has drawn sharp
criticism from several parties, including a Congressional Oversight Panel
monitoring the Treasury's activities.
Critics maintain Treasury would earn better returns by holding public
auctions. "If these warrants are sold to third-party investors, this auction
could double the value of the publicly traded warrant market over night," said
Linus Wilson, a University of Louisiana at Lafayette finance professor.
-By Meena Thiruvengadam, Dow Jones Newswires; 202-862-6629;
meena.thiruvengadam@dowjones.com
(END) Dow Jones Newswires
11-20-091747ET
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