New York (HedgeCo.net) – The fund which the U.S. House Financial Services Committee is setting up to dismantle large insolvent financial institutions will be limited to $200 billion, MarketWatch reported earlier today.

“The cap we have is $200 billion,” House Financial Services Committee Chairman Barney Frank said, referring to legislation which would collect funds from large financial institutions and hedge funds with $10 billion in capital or more.

The Chairman’s regulatory-overhaul package, in opposition to the Obama administration, which wants to collect fees after a company fails, is up for vote by the House this month. The fund would be used to make payments to creditors and counterparties of a large failing financial institution so that its collapse does not unsettle the financial markets.

Alex Akesson
Editor for HedgeCo.net
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Tags: barney frank, financial-institutions, hedge fund, obama

New York (HedgeCo.Net) – As the national outrage over bonuses paid to AIG execs reaches epic proportions, U.S. Treasury Secretary Timothy Geithner promised the government will recoup the $165 million that was shelled out using bailout money.

“We will impose on AIG a contractual commitment to pay the Treasury from the operations of the company the amount of retention rewards just paid,” Geithner wrote, after claiming it would be difficult to physically take back the bonuses.  “In addition, we will deduct from the $30 billion in assistance an amount equal to the amount of those payments.”  

Arguing that the U.S. government essentially owns a majority of the failed insurance giant, Chairman of the House Financial Services Committee Barney Frank said, “I think the time has to exercise our ownership rights, and then say, as owner, ‘No, I’m not paying you the bonus. You didn’t perform. You didn’t live up to this contract.’”

House Speaker Nancy Pelosi agreed, saying she would urge members to draft legislation this week that could recoup frivolous spending from taxpayer-funded aid.

“Most appallingly, while millions of Americans struggle through this economy, those who have received the largest measure of taxpayer assistance from the Treasury Department have shown no restraint,” Pelosi said.

New York Senator Charles Schumer warned that if those bonuses were not returned to their “rightful owners,” then Congress would pass laws to tax those bonuses “at a very high rate.”  Senate Finance Committee members agreed, proposing taxes as high as 70 percent on those payments.

While disdain over the issue may have caused Barack Obama to act swiftly, the nearly decimated public opinion on bailouts may pose a problem for institutions seeking government funds going forward.  AIG has so far received $173 billion of taxpayer-funded federal assistance.

Julie Scuderi
Senior Editor for HedgeCo.Net
Email: julie@hedgeco.net

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Tags: barack obama, barney frank, charles schumer, contractual commitment, epic proportions, financial-services-committee, hedgeco, house-financial-services-committee, house-speaker-nancy-pelosi, insurance giant, nancy-pelosi, national outrage, senate finance committee, senator charles schumer, speaker nancy pelosi, taxpayer assistance, timothy geithner, treasury-department, treasury-secretary, u-s-treasury

Connecticut Post – It was with amusement that I read that freshman U.S. Rep. Jim Himes, D-4, will now be a member of the House Financial Services Committee. Why? Because of his expertise? Does anyone realize that he was trained and made millions of dollars at Goldman Sachs? Yes, one of the firms that is responsible for the mess this country is in with exotic investments and subprime mortgages and plenty of greed!

We will never learn and the taxpayers will get fleeced again. Himes can work closely with Rep. Barney Frank and Sens. Christopher J. Dodd and Charles Schumer and others who managed to create quite a mess with a lack of oversight on subprime mortgages that were originated and sold in pieces on Wall Street.

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Tags: barney frank, charles schumer, connecticut post, dodd, financial-services-committee, freshman, goldman-sachs, greed, himes, house-financial-services-committee, investments, oversight, sens, subprime-mortgages, taxpayers, wall street