US could create another RTC(3)

The specter of a return to the 1989 Resolution Trust Corporation was raised today as the US Treasury said it would introduce a ‘relief program’ for troubled mortgage assets. If formed, the program would consolidate an enormous pool of assets for opportunistic buyers to feast upon.

US Treasury Secretary Henry Paulson has moved to bail out banks from their troubled real estate assets in a move reminiscent of the 1989 creation of the Resolution Trust Corporation (RTC).

Paulson said in a press conference today that an “asset relief program” would involve “hundreds of billions” of taxpayers’ dollars and be “sufficiently large [enough] to have maximum impact.”

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