Washington Post "Mr. Geithner Unwinds"
The Washington Post's "Mr. Geithner Unwinds" says, "Testifying before Congress has not always been fun for Treasury Secretary Timothy F. Geithner. But his Thursday visit to Capitol Hill gave him a chance to report some good news. According to Mr. Geithner, the threat to money-market mutual funds, which hold more than $3 trillion in assets, has eased. The Treasury can unwind its program that guaranteed the share price of these funds in return for a fee. The Bush administration created it on Sept. 19, 2008, after the collapse of Lehman Brothers and the resulting shock to the market for short-term corporate debt known as commercial paper. Mr. Geithner's announcement confirms that the guarantee, which the Obama administration extended, helped prevent a devastating run on the money-market funds. The government even made $1.2 billion on the deal. The fact that Mr. Geithner can remove this crutch from the financial system is further evidence of its healing, as the first anniversary of the Lehman Brothers debacle approaches. So, too, is the Federal Deposit Insurance Corp.'s reported plan to either end or sharply limit a $300 billion guarantee program for bank debt by the end of October." In other news, see FT's "Bank runs left repo sector exposed", WSJ's "There's No Such Thing as a 'Safe' Investment", WSJ's "Reserve Yield Plus Investors in SEC Plea", and WSJ's "Government's Trial and Error Helped Stem Financial Panic".
