Treasury's Kashkari Says ABS Market Looks Promising for TARP

The asset-backed securities market appears to be promising for the TARP program, said TARP co-ordinator Neel Kashkari in a speech on Wednesday.

Targeting the ABS market will help bring down interest rates on automobile purchases, student loans and credit cards, he told attendees of the Women in Housing and Finance and Exchequer Club of Washington Policy Luncheon.

However, although the financial system has been stabilized, the economy nevertheless continues to face some real economic challenges, added the policy- maker.

He also said he was pleased that so many healthy banks had applied for government aid, and stressed the importance of referring to the TARP as an investment rather than a bailout plan.

The comments come just one day after U.S. Treasury Secretary Henry Paulson told lawmakers on Capitol Hill that the $700 billion TARP was designed to stabilize the financial system and improve lending liquidity, and "is not a panacea for all our economic difficulties."

Paulson plans to leave the remaining $410 billion of the program to his successor.

By Erik Kevin Franco and edited by Sarah Sussman
©CEP News Ltd. 2008