are to come out and the democrats are to come out and say i believe her. the republicans are in essay i don't believe her. the rest of us don't get a choice. i don't like the private physician, the private function of doing it. >> you can see the rest of this conversation online at d cspan.org and we will leave it at this point. a reminder that on capitol hill, the senate judiciary committee has postponed that vote that has been scheduled for today on bret cavanaugh's confirmation to the supreme court. committee chair chuck grassley has invited the woman who accuses bret cavanaugh of sexually assaulting her to testify before the committee at 10:00 a.m. eastern on monday. chairman grassley is also invited a nominee to testify to respond to the allegations, but christine ford had said she wants the fbi to investigate the allegations before she testifies. president trump has refused to order an fbi investigation. if the hearing does go forward as planned on monday at

10:00 a.m., we will have live coverage on c-span, also online at cspan.org and you can listen with the free c-span radio app. >> 2018 marks the ten year anniversary of the financial crisis which saw the collapse of the u.s. housing market and brought the economy close to a second great depression. the months of september and october of 2008 included a number of important development developments. the government took over the home mortgage holding companies fannie and freddie. >> , the investment bank lehman brothers declared bankruptcy prompting the stock market to drop more than 500 points. and the bush administration announced the troubled asset relief program or tarp which was initially rejected by the house of representatives, but later passed in early october. we are going to show you what public officials were saying about the financial crisis at the time followed by a recent discussion at the brookings institution marking the ten year anniversary.

we begin with press secretary henry paulson speaking with reporters at the white house on september 15, 2008. the same day as the lehman brothers bankruptcy. >> good afternoon everyone. i hope you all had an enjoyable weekend. as you know, we are working through a difficult period in our financial markets right now as we work off some of the past excesses, but the american people can remain confident in the soundness and resilience of our financial system. i commend the sec and the fed for their work over the weekend convening leaders of financial institutions from around the world to meet the current challenges and put measures in place to reduce market stresses. i'm particularly pleased that these major market participants were willing to make extraordinary commitments

to market stability as we manage through this turmoil. their actions will complement the important steps taken by the fed and the fcc and will help minimize disruptions to our markets and to our broader economy. as you've heard me say before, the strength is important to every american, to their household budget and the ability to find affordable financing for home, car, college tuition and to finance small business expansion. let me step back a bit and provide a little perspective. as i have long said, the housing correction is at the root of the challenges facing our markets and our financial institutions. i believe we have taken very important steps with respect to fannie mae and freddie. >> and very are among the most important actions we can make to work through this turmoil. lastly, i'm committed to working with regulators here and abroad as well as

policymakers and congress to take additional necessary steps to maintain the stability and orderly financial markets. thank you all. let me take your questions. >> can you talk about what the federal role should be going forward? are we likely to see federal involvement like we did with fannie, freddie. >> the federal role is also very important because as you've heard me say, nothing is more important than the stability of our capital so i think it's important to regulate remain very vigilant. we are very vigilant. we do not take, and i do not take lightly the taxpayer on the line to support an institution. >> can we read it as no more. >> don't read it as no more,

read it as i think it's important for us to maintain the stability of our financial system, moral hazard is something i don't take lightly , the other thing i think i would like to focus you on is the way our financial system came together. leaders coming together to do things to support the markets and that's what i would like to see continue to happen. >> put aside for a second the specific demand, can you just tell us how this happened and how do we get there? beyond housing correction, take us back to him explain to the american people, how do we get here. >> i would say first of all we have access, excesses that have built up prolonged period of time. number two, we have an archaic financial regulatory structure that came in place a long time ago after the depression, it really needs to be rebuilt, and then there certain things like fannie and freddie, the roots of that, what were doing

is living up to our responsibilities which were rooted in congressional charters that go back decades and have been perpetuated by washington. but again, what we are focused on right now is the future and the future is or orderliness in our financial and that's what were doing. >> what kind of regulation? >> i think there has to be a balance between regulation and market discipline. you can't rely on one to solve the problem, but it's going to have to be streamlined and more effective regulation. there is major changes that we need and we also need major authorities to wind down financial institutions that aren't banks, aren't federal institutions with deposit insurance, we need resolutions and authorities to let us deal

with situations like lehman brothers. >> how concerned are you about commercial banks, and what reassurance can you offer the american people who may be concerned about their checking account thematic our banking system is safe and sound and since the days we've had federal deposit insurance in place, we haven't had a depositor who got less than a hundred thousand dollars lose a penny. the american people can be very confident of the accounts and our banking system. >> when you talk about the future. >> let me just ask two things, could you explain a little bit more about the authorities you think might be needed and if so be additional regulation or legislation. >> let me say, in the longer term clearly we need major regulatory changes. i've spoken a lot about that.

we could use additional authorities to deal with non-bank financial institutions, but again, that's going to take longer for congress to do and right now we are working with the tools we have and what you are finding is the fed, the sec, treasury, the fda see were all working together and we are to protect the system with the tools we have for. >> mr. secretary, this morning senator mccain promised, in regard to the economy we will never put america in this position again. sarah palin said when it comes to the economy it's asleep at the switch and ineffective. what blame should the bush administration take for this kind of economic situation in the united states. have you been asleep at the switch. >> we are in the middle of a presidential campaign. we will let the campaigns fight it out, make their cases to the american people, i'm

not focused on politics right now, i'm not looking back, i'm looking forward in this president is very committed to the stability of the financial system and its importance to the economy and that's where i'm focused. >> where have you taken steps in the economy hasn't gotten better. >> i would say this, i'm playing the hand that was dealt me, a lot of what i'm dealing with, i'm dealing with the consequences of things that were done often many years ago as i said was the case with fannie and freddie, that's congressional charters going back, washington was put in place, what were dealing with there, for instance is living up to our responsibilities and in other cases were dealing with again the situations we see and again, i'm focused on the stability of the markets and importance to the american people. >> why did you agree to support the bailout. >> the situation in march and

the situations in the facts around bear stearns were very different to the situation we are looking at here in september. i never once considered that it was appropriate to put taxpayer money on the line in resolving lehman brothers, and here, again, i want to commend the financial institutions from around the world for coming together and really taking some very constructive positive steps to make our market work in the time when i leave that. >> concept ever 24th, president bush addressed the nation in primetime calling on congress to pass a plan known as tarp which would expand the government's ability to shore up the financial markets and stabilize the banking system. >> good evening. this is an extraordinary. for this american economy. over the past few weeks, many americans have felt anxiety about the finances in the

future. i understand their worry and the frustration. we have seen triple digit swings in the stock market. major financial institutions have teetered on the edge of collapse and some have failed. as uncertainty has grown, many banks have restricted lending. credit markets have frozen and families and businesses have found it harder to borrow money. we are in the midst of a serious financial crisis. the federal government is responding with decisive action. we boosted confidence and money market mutual funds and acted to prevent major investors from intentionally driving down stocks for their own personal gain. most important, my administration is working with congress to address the root cause behind much of the instability in our markets. financial assets were related to home mortgages and have lost value during the housing decline. the banks holding these assets have restricted credit. as a result, our entire economy is in danger.

so i propose that the federal government reduce the risk posed by these troubled assets and supply urgently needed to needed money so banks and other financial institutions can avoid collapse and resume lending. this rescue effort is not aimed at preserving any individual company or industry. it is aimed at preserving america's overall economy. it will help american consumers and businesses get credit to meet their needs and create jobs. it will help send a signal to markets around the world that america's financial system is back on track. i know many americans have questions tonight. how do we reach this point in our economy, how will the solution i propose work, and what does this mean for your financial future. these are good questions, and they did deserve clear answers. first, how did our economy reach this point? most economist agree that the

problems we are witnessing today developed over long. of time. for more than a decade, a massive amount of money flowed into the united states from investors abroad because our country is an attractive and secure place to do business. this large influx of money to u.s. banks and financial institutions, along with low interest rates made it easier for american to get credit. these development allowed more families to borrow money for cars and homes and college tuition. some for the first time. damn allowed more entrepreneurs to get loans to start businesses and create jobs. unfortunately, there were also some serious negative consequences, particularly in the housing market. easy credit combined with the faulty assumption that home values would continue to rise led to excesses and bad decisions. many mortgage lenders approved loans for borrowers without carefully examining their ability to pay.

many borrowers took out loans larger than they could afford. they assumed they could sell or refinance their homes at a higher price later on. optimism about housing values also led to a boom in home construction. eventually, the number of new houses exceeded the number of people willing to buy them. with supply exceeding demand, housing prices fell. this created a problem. borrowers with adjustable-rate mortgages, who they had been planning to sell or refinance at a higher price were stuck with homes worth less than expected. along with mortgage payments they could not afford. as a result, many mortgage holders began to default. these widespread defaults have effects far beyond the housing market. in today's mortgage industry, home loans are often packaged together and converted into financial products called mortgage-backed securities. these securities were sold to investors around the world. many investors assumed securities were trustworthy

and asked a few questions about their actual value. to the leading purchasers of mortgage-backed were fannie mae and freddie. because these companies were chartered by congress, many believe they were guaranteed by the federal government this allowed them to borrow enormous sums of money. few of the markets were questionable investments and put our financial system at risk. the decline in the housing market set off a domino effect across our economy. when home values declined, borrowers defaulted on their mortgages and investors holding mortgage-backed securities began to incur serious losses. before long, the securities became so unreliable they were not being bought or sold. investment banks such as bear stearns and lehman brothers found themselves saddled with large amounts of assets they could not sell. fred they faced imminent

collapse. other banks found themselves in severe financial trouble. they all. [inaudible] situation became more precarious by the day. i faced a choice to step in with dramatic government action or to stand back and allow the irresponsible actions of some to undermine the financial security of all. i'm a strong believer in free enterprise. so my natural instinct is to oppose government intervention. i believe companies that make bad decisions should be a lot allowed to go out of business. under normal circumstances i would've followed this course, but these are not normal circumstances. the market is not functioning properly. there has been a widespread loss of confidence and major sectors of america's financial system are at risk of shutting down. the government's top economic

experts warned that without immediate action by congress america could slip into financial panic and a distressing scenario would unfold. more banks could fail including some in your community. the stock market would drop even more which would reduce the value of your retirement account. the value of your home could plummet. foreclosures would rise dramatically. and if you own a business or farm, you would find it harder and more expensive to get credit. more businesses would close their doors and millions of americans could lose their jobs. even if you have good credit history, it would be more difficult for you to get the loans you need to buy a car or send your children to college. ultimately our country could experience a long and painful recession. fellow citizens, we must not let this happen. i appreciate the work of leaders from both parties and both houses of congress to address this problem. to make improvements to the

proposal my administration sent them. there is a spirit of cooperation between democrats and republicans and between congress and this demonstration. in that spirit, i have invited senators to join at the white house tomorrow to help speed our discussions toward a bipartisan bill. i know that an economic rescue package will present a top vote for many members of congress. it is difficult to pass a bill that commits so much of the taxpayers hardened money. i also understand the frustration of responsible americans who pay their mortgages on time, file their tax returns every april 15 and are reluctant to pay the cost of excesses on wall street. but given the situation we are facing, not passing a bill now would cost these americans much more later. many americans are asking how would a rescue plan work? after much discussion, there is now widespread agreement on the principle of such a plan.

it would remove the risk posed by the troubled assets, including mortgage-backed securities now clogging the financial system. this would free banks to resume the flow of credit to american families and businesses. any rescue plan should also be designed to ensure that taxpayers are protected. it should welcome the. dissipation of financial institutions, large and small, it should make certain that failed executives do not receive a windfall from your tax dollars. it should establish a bipartisan board to oversee the plan's implementation and it should be enacted as soon as possible. in close consultation with treasury secretary hank paulson, federal reserve chairman and sec chairman chris cox, i announced a plan on friday. first of the plan is big enough to solve a serious problem. under our proposal the federal government would put up to 700 billion taxpayer dollars on the line to purchase

troubled assets that are clogging the financial system. in a short term this will free up banks to resume the flow of credit to american families and businesses. this will help our economy grow. second, as markets have lost confidence in mortgage-backed securities, their prices have dropped sharply. if the value of many of these assets will likely be higher than the current price because the vast majority of americans will ultimately pay off their mortgages. the government is the one institution with the patients and resources to buy these assets at their current low prices and hold them until markets return to normal. when that happens, many will flow back to the treasury as these assets are sold and we expect much if not all of the tax dollars we invest will be paid back. >> on september 29, 2008, the house of representatives failed to pass the troubled asset relief program trumping a stock market crash of more than 700 points.

final passage came october 3 after the senate sent the bill to the house for a second vote. here is resident barack obama from the senate floor speaking on october 1. >> the fact that we are even here voting on a plan to rescue our economy from the greed and irresponsibility of wall street and some in washington, it's an outrage. it's an outrage to every american who works hard, pays her taxes and is doing their best every day to make a better life for themselves and their families. understandably, people are frustrated and angry. the wall street's mistakes have put their tax dollars at risk and they should be. i'm frustrated and angry too. but while there is plenty of blame to go around and many in washington and wall street who deserve it, all of us have a

responsibility to solve this crisis because of the fact that the financial well-being of every single american, there will be time to punish those who set the fire, but now is not the time to argue about how it got set or did the neighbor sleep in his bed or read the. [inaudible] right now we want to put out that fire. now is the time for us to come together and do that. when the house of representatives failed to act on monday, we saw the single largest decline in the stock market in two decades. over $1 trillion of wealth was lost by the time the markets closed. it wasn't just the wealth of a few ceos or wall street executives. the 4o1k and retirement accounts of millions became smaller. the state pension fountains of teachers and government employees lost billions upon

billions of dollars. hard-working americans who invested their nest egg site diminish and in some cases disappear. while that decline was devastating, the consequences of the credit crisis that caused this will be even worse if we do not act fast. it's a very dangerous situation where financial institutions across the country are afraid to lend money. if all that meant was a failure of a few banks in new york, that would be one thing, but that's not what it means. what it means is if we don't act there it will be harder for americans to get a mortgage for their home or loans they need to buy a car or send their children to college. what it means is businesses will be able to get the loans they need to open a new factory or make payroll for the workers. : : :

i understand completely why people would be skeptical when the president asked for a planning check to solve this problem. i was, too. as was senator dodd and a whole bunch of us here. that's why over a week ago i demanded that this plan include some specific proposals to protect taxpayers, protections that the administration eventually agreed to and thanks to the hard work of senator dodd and republican counterparts like

senator greg, we here in the senate have agreed to and hopefully the house will agree to as well. i said we needed an independent board to provide oversight and accountability for how and where the money is spent at every step of the way. number two i said that we cannot help bank on wall street without helping the millions of innocent home owners struggling to stay in heir home. they deserve a plan, too. number three, i said i would not allow this plan to become a welfare program for wall street executives whose greed and irresponsibility got us into this mess. and finally i said if american taxpayers are financing this solution, then they have to be treated like investors and get every penny of their tax dollars back once the economy recovers. this last part is important because it's been the most misunderstood and poorly communicated part of this plan. this is not a plan to just hand

over $700 billion of taxpayer money to a few banks. it if the is managed correctly -- that's an important in -- we'll hopefully get most or all of our money back and possibly eastern turn a profit on the government's intervention. every penny of which will go directly back to the american people. if we fall short we levy a fee on financial institutes so they can repay the loss they caused. let's acknowledge, even with all this taxpayer protections this plan is not perfect. democrats and republicans in congress have legitimating concerns about it. some of my closest colleagues, people i have the greatest respect for still have problems with it and may choose to vote against the bill. think we can respectfully disagree. i fund their frustration and i know american americans share the concerns but it's clear that from my perspective this is what

we need to do right now to prevent the possibility of a crisis turning into a catastrophe. it is conceivable, it's possible if we did nothing, everything would turn out okay. there's a possibility that is true. and there's no doubt there may be other plans out there that had we had two or three or six months to develop, might be even more refined and might serve our purposes better. but we don't have that kind of time. we can't afford to take a risk that the economy of the united states of america and as a consequence the worldwide economy could be plunged into a very, very deep hole. so, the democrats and he republicans who have opposed this plan, i say, step up to the plate, let's do what is right for the country at this time because the time to act is now. >> our program on the ten-year

norse of the financial crisis continues with treasury sect henry paulson and federal reserve chair benazir benber uns can i. speaking after the t.a.r.p. program was signed into law. >> good morning. america is a strong nation. we are a confident and optimistic people. our confidence is born out of our long history of meeting every challenge when faced. time and again our nation has faced adversity and time and again we have overcome it and risen to new heights. this time will be no different. today there is a lack of confidence in our financial system. a lack of confidence that best me conquered because it poses an enormous threat to our economy. investors are unwilling to lend to banks, and healthy banks are

unwilling to lend each other, and to consumers and to businesses. in recent weeks the american people have felt the effects of a frozen financial system. they have seen reduced values in their retirement and investment accounts. they have worried about meeting payrolls and worried about losing their jobs. families all across the nation have gone through long days and long nights of concern about their financial situations today and their financial situations tomorrow. without confidence their most basic financial needs will be met americans lose confidence in our economy and this is unacceptable. president bush has directed me to consider all necessary steps to restore confidence and stability to our financial markets and get credit flowing again. ten days ago, congress gave important new tools to the

treasury, the federal reserve and the fdic to meet the challenges posed by our economy. my colleagues and i are working creatively and collaboratively to dough employ -- deploy this tools and direct our powers to disrunning of the economy. today we're talking decisive actions to protect the u.s. economy. we regret having to take these actions. today's actions are not what we ever wanted to do, but today's actions are what we must do to restore confidence in our financial system. today i am announcing that the treasury will purchase equity stakes in a wide variety of banks and thrifts. government owning a stake in my private u.s. company is objectionable to most americans, me included. yet the alternative of leaving

businesses and consumers without access to financing is totally unacceptable. when financing isn't available, consumers and businesses shrink their spending, which leads to businesses cutting jobs, and even closing up shop. to avoid that outcome we must restore confidence in our financial system. the first step in that effort is a plan to make capital available on attractive terms to a broad array of banks and thrifts so they can provide credit to our economy. from the $700 billion financial rescue package, treasury will make 250 billion in capital available to u.s. financial institutions in the form of preferred stock. institutions that sell shares to the government will accept restrictions on executive compensation, including a claw-back provision and a ban on

golden parachutes during the period the treasure owns equity from the program. in addition, taxpayers will not only own shares that should be paid back with a reasonable return, but will also receive warrants for common shares and participating institutions. we expect all participating banks to continue and to strengthen their efforts to help struggling homeowners who can afford their homes, avoid forks. -- avoid foreclosure. foreclosures heard the families who -- hurt the families, they hurt neighbors, communities and our economies as a whole. while many banks have suffered significant losses during this period of market turmoil, many others have plenty of capital to get through the period but is not positioned to lend as widely as necessary to support our economy. our goal is to see a wide array of healthy institutions sell preferred shares to treasury and

raise additional private capital so that they can make more loans to businesses and consumers across the nation. at a time when events naturally make even the most daring investors risk adversity, the needs of our economy require that our financial institutions not take this new capital to hoard it but to deploy it. nine large financial institutions have already agreed to participate in this program. they have agreed to sell preferred shares to the u.s. government on the same terms that will be available to a broad array of small and middle-sized banks and thrifts across our nation. these are healthy institutions, and they have taken this step for the good of the u.s. economy. they will be able to increase their furnishing to u.s. consumers and businesses.

i am joined here this morning by chairman ben bernanke and chairman bear who have taken extraordinary actions to support investor confidence in our financial system so that funds will again flow through the banks to in the u.s. economy. each of them will describe their actions. combined, our action are extensive, powerful, and transformative. they demonstrate that the government will do what is necessary to restore the flow of funds on which our economy depends and will act to avoid, where possible, the failure of any systemically important institution. these three steps strengthen -- significantly strengthen financial institutions, enabling them to increase financing of consumption and business invest to drive u.s. economy growth. market participants here and around the world can take great

confidence from the powerful action taken today and our broad commitment to the health of the global financial system. we are acting with unprecedented speed, taking unprecedented measures we never thought would be necessary, but they are necessary to get our economy back and on an even keel, and secure the confidence of the future of our markets, our economy, and the economic well-being of all americans. thank you. now i am going to turn the podium over to chairman ben bernanke. >> good morning. before i begin, i want to express my appreciation of my colleagues, secretary paulson and chairman bear, for 30s what has been an extraordinary collaboration. as americans will know, the challenges evident in the financial markets and the economy are large and complex. but i believe that the steps taken today will help to us

overcome them. our strategy will continue to evolve and be refined as we adapt new developments and the inevitable setbacks. but we will not stand down until we have achieved our goals of repairing and reforming our financial system and their restoring prosperity to our economy. over the past year the federal reserve has actively used all its powers and authorities to try to help this economy through this difficult time. and central banks around the world have consult closely and cooperated in unprecedented ways to reduce strains in our financial markets and bolster our economies. we will continue to do so. however, clearly the time had come for more comprehensive and broad-based solutions. history teaches us that government engage independent times of severe financial crisis often arrives very late, usually another a paint which most

financial institutions are insolvent or nearly. so lating too along to act has costs -- michigan any identified the page effect-of-financial turmoil on households and businesses. this is not the situation we face today. fortunately, the congress and the administration have acted at a time when the great majority of financial institutions, though stressed by highly volume still difficult market conditions, remain capable of fulfilling their critical function of providing new credit to our economy. the congress' prompt and decisive action in passing the financial rescue legislation made possible the critical extend we're announcing this morning. fine it hart heardenning we're seeing a global response to the crisis. commence commensurate with the global nature. the finance ministers and central bank offered the g-7

industrialized companies announced a set of principles embodying a comprehensive approach to dealing with the crisis. the steps we're taking today are fully consistent with the principles. at the root of the problem is a loss of confidence by investors and the public in the strength of key financial institutions and markets which has had cascading and uncounty effect on the ability of credit and on the value of savings. the actions today are aimed to restore confidence in our institutions and markets and repairing their capacity to meet the credit needs of american households and businesses. the voluntary equity purchase program described by the sect will strengthen institution's capacity and willingness to lend. the guarantee of senior debt of all fdic insured institutions and their hold companies will rester the confidence of the institutions' credit cores cored reinvigorate lending markets and the federal reserve is pressing

forward with its facility to provide a broad backstop to the commercial paper market so vital to the functioning of businesses. policymakers here and around the globe have taken a series of extraordinary steps. americans can be confident that every resource is being brought to bear. historical unking, technical expertise, economic analysis and political leadership. i am not suggesting that the way forward will be easy. but i strongly believe that the application of these tools, together with the underlying vitality and resilience of the american economy, will hope to restore confidence to our financial system and place our economy back on a path to healthy, vigorous growth. thank you. >> former new york federal reserve bank president tim geithner was appointed to serve as treasury secretary during the obama administration. on february 10th, 2009, he announced a new effort aimed at

stabilizing the financial markets. following his remarks we'll show you a recent event with secretary geithner others marking the ten year anniversary of the financial crisis. >> last fall, as the crisis intensified, congress acted quickly and courageously to give your government the emergency authority to help contain the damage. your government used that authority to help pull the financial system back from the edge of catastrophic failure. and those actions were absolutely singh shat bull they were unanimous kuwait. the forced government support was not comprehensive or quick enough to withstand the acute pressure of a weakening economy and assistance provided to the same institutions that helped cause the crisis added to public distrust and this distrust turned anger as boards directors at some institutions continued to reward rich compensation packages and laugh -- lavish

perks to senior executives. our challenge is greater today because the american people have lost faith in the leaders of some financial institutions and they're skeptical their government has used taxpayer money in ways that will benefit them. this has to change. to get credit flowing again, to restore confidence in our markets, and to restore the faith of the american people we're going to fundamentally shape our program to repair the financial system. our work will be guided by he lessons of the last 18 months and by financial crisis in history and the basic principles that will shape our strategy are the following. we believe that policy has to be con people sin and fort. there are -- comprehensive and forceful. we believe that action has to be sustained until recovery is firmly established. in this country and n the 1930s in japan in the 1990s and many cases elsewhere around the world, crises lasted longer

and they caused greater damage because governments applied the brakes too early. we cannot make that mistake. we believe that access to public support is a privilege, not a right. when our government provides supports to bank, it is not for the benefit banks. it is for the businesses and families he depend on banks and the ben out of the country. government support has to come with strong conditions to protect the taxpayer and with transparency that allow thursday person people to see the impact of those investments. we believe our policies must be designed to mobilize and leverage private capital, not to supplant or discourage private capital. when government investment is necessary it should be replaced with private capital as soon as that is responsible we believe that the united states has to send a clear and consistent message we will took the prevent the catastrophic failure of finance institutions that would

damage the broader economy. guided by these principles we'll replace the current program with a new financial stability plan designed to stablize and repair the financial system and report to -- support the flow of credit that is necessary for recovery. this new financial plan will take a comprehensive approach. the department of the treasury, the federal reserve, the fdic and all the financial agencies in our country will bring the full force of the united states government to bear to strengthen our financial system 0so we get the economy back on tramp. these agencies have different authorities, instruments and responsibilities but we are one government, serving the american people, and we will work together as one. here's what we'll. do our work begins with a new framework of oversight and governance a on our plan. the american people will be able to see where their tax dollars are going the return on their government's investment. they will be able to see whether

the conditions placed on banks are being met and enforced. they will be able to see whether boards of directors are being responsible with the taxpayer dollars and how they are compensating their executives and they will be able to see how these actions are affecting the overall flow of lending and the cost of borrowing. these new requirements which will be available on a new web site, financial stability.gov give the american people the transparency they deserve. these steps build on things we have already done. we have acts to ensure the integrity of the process that provides access to government support so that it is independent of influence from lobbyists and politics. we committed to provide the american people with the information on how their money is spent and under what conditions by posting these contracts on the internet. and importantly we have outlined strong conditions on executive compensation. now, under this framework, we are establishing three new

programs to clean up and strengthen the nation's banks to bring in private capital to restore lending and go around the banking system directly to market, consumers and businesses depend on. let me describe the steps. first, we'll require banking institutions to go through a carefully designed comprehensive stress test, this borrows a medical term. we want balance sheets cleaner and stronger and will provide a new program of capital support for those institutions that need it. to do this we'll bringing to the agencies with authority over the nation's banks and initiate more consistent, realistic, ford-looking assessment about the exposures on bank balance sheets and introduce new measures to improve disclosures. those institutions that need additional capital will be able to access a new funding mechanism that uses capital from the treasury as a bridge to private capital the capital will

come with conditions to happen sure sure every dollar is being used achieve a level of lending greater that would have been possible in the absence of government support and this assistance will come with terms that should encourage the inuses to row play public assistance with private capital as soon as that is possible. the treasury's investment in these institutions will be placed in a new financial stability trust. now, second, we'll work together with the federal reserve, with the fdic and at the private sector establish a public-private invest program which will help leverage private capital. this fund will be targeted to the less going loans and assets burning financial institutions by providing the financing, the private acts cannot now provide, this will help start a market for the real estate-related assets at the center of this financial crisis. our objective is to use private

capital and private asset managers to help provide a market mechanism for value the assets. we're exploring a range of different structures and will seek input from the public as we design this program. we believe this program should provide up to $1 million in financing capacity and we plan to start it on scale of 500 billion and expand it based on what works. the third piece of this program. working jointly with the federal reserve we're prepared to commit up to a trillion dollars to support consumer and business lending. this initiative will help kickstart the secondary lehning markets to help get credit flowing again. in our financial system, roughly 40% of consumer lending has typically been made available because people buy loans, put them together and sell them. and because this vital source of lehning has frozen knock recovery program will be

successful unless i restarts the markets for sound loan made to consumers and businesses large and small. this program will be built on the federal reserve's term asset backed securities loan facility announced last november, with capital from the tellsry and financing from the federal research we have agreed to program to target markets critical for small business lend, student loans, consumer, auto finance and consumer mortgages inch addition, because small businesses are so important to our economy, we'll take some additional steps to make it easier for them to get credit from community banks and large banks by increasing the federally guaranteed portion of small business administration loans and by giving more power to the sba toed and died loan approvals we believe we can turn around the dramatic decline in sba lending we have seen in recent months. finally -- this is critically important -- we will launch a

comprehensive housing program. millions of americans have lost their homes and millions more live with the risk they will be knuble meet their payments or refinance their mortgages. many of these families borrowed beyond their means but many others fell victim to terrible lending practices that left them exposed, overextended with no way to refinance. homeowners around the country are seeing the value of home falls because of forces they did not create and cannot control. this cries in housing has had devastating consequences and our government should have moved more forcely to help contain the damage. as housing prices fall, demand for housing will increase and conditions will find a new balance and we're seeing that happen in parts of the country today but now we risk an intensifying spiral in which lenders foreclosure, pushes house prices losing and reducing household savings, making it harder for families to refinance.

the president has asked the economic team to come together with a plan. but our focus wail be on using the resources of the government to help reduce mortgage i interest rates. we'll do if the rice sow resources understand by the congress under the emergency economic stablizeddation act. i want to act that looking forward, president obama is committed to moving quickly to reform our entire system of financial regulations so that we never again face a crisis of this severity. we are consulting with chairman chris dodd in the senate, chairman barney frank in the house on the broad outline of reforms. the we will start working close live with the world's leading communes set of broader reforms

to the international national system in preparation for the g-20 summit in london on april 2nd. the excels of this plan, the success of our financial stability plan will require an unprecedented level of cooperation here in the united states and around the world. federal reserve chairman ben bernanke, fdic chair sheila bear, john rich, the head of the office of supervision, i want to thank them for helping shape this plan and thank them for their commitment to making it work. this program is going to require a substantial and sustained commitment of public resources. congress has already authorized substantial resources for the effort and we are use this resources as carefully and effectively as possible. we'll consul closely with the congress and working to to make sure have the resources and authority to make this work. late are this week i'll be meeting with the g-20

financial -- we'll start the process withworking with international partners to ensure we're working to to help strengthen the global economy and repair the finance system and we'll work closely with the leadership of the imf and world bank to help those countries around the world that are most at risk from this crisis. now, many of the prams discussed involve vary -- very large number bit but it's important to recognize the program involve loans and investments with terms and conditions that will help protect the taxpayer and help compensate the government for the risk we are taking. and because of these terms and conditions, the risk to the taxpayers will be less than the headline numbers. our obligation is to design these programs so that we are achieving the largest benefit in terms of supporting recovery at the least cost to the taxpayer and wick at that time obligation extremely seriously but i want to be candid. this strategy will cost money,

it will involve risk and it will take time but as costly as thisert may be we know the cost of a complete collapse of the financial system would be -- four businesses and nation. we are going to have to adapt our program as conditions change, we'll have to try thing never trade before. we'll make mistakes. we will go through periods in which things get worse and progress is uneven or interrupted. but we'll be guided by core principles of dead kitted objective of restore credit and committed to moving our nation towards an economic recovery that is as swift and widespread as possible. ...

thank you very much. thank you for coming. [applause] >> you have been watching events from 2008 on the financial crisis featuring treasury secretary henry paulson, federal reserve chair ben bernanke and treasury secretary tim geithner. they sat down together at the brooking institution for discussion with "new york times" financial columnist andrew ross sorkin, author of too big to fail.