Treasury to Name Former Goldman Banker as Interim Head of Rescue Op

Neel Kashkari, former vice-president at Goldman Sachs and current assistant secretary of international affairs at the U.S. Treasury, is expected to become the interim head of the $700 billion rescue package, according to anonymous sources who spoke to the Washington Post and the Wall Street Journal.

Known to be a close adviser to Secretary Henry Paulson, Kashkari helped draft the legislation for the unprecedented package that was approved by the House on Friday.

The sources say the 35-year old Kashkari would direct the program until a more permanent head is chosen. His replacement would likely continue running the program once the next president takes office in the new year, the sources said.

On Monday, the Treasury began the hiring process for five to 10 asset managers. The anonymous officials said the purchasing of assets will likely begin in mid-November, though officials are working to implement the program as soon as possible.

According to the Washington Post, hiring asset managers from some of the top management companies poses a potential conflict of interest, as the managers "would be overseeing the assets while also selling their own troubled securities to the government."

The WSJ said anyone with direct experience with the troubled assets in question is likely to work for a firm with a stake in the outcome. "Congress told Treasury to establish guidelines to deal with these conflicts and Treasury is likely to establish 'firewalls' between asset managers who work for the department and their firms to avoid anyone sharing information," the newspaper said.

By Patrick McGee and edited by Nancy Girgis
©CEP News Ltd. 2008