Originally appeared in MiFID Monitor
Tim Ryan, president and CEO of the Securities Industry and Financial Markets Association (Sifma), has called for the US Treasury to focus on the creation of price discovery through some type of transparent purchase programme as part of the Troubled Asset Relief Program (Tarp). Following last week’s discussions with US Treasury secretary Henry Paulson concerning Tarp, Ryan praised the government’s efforts but warned that the asset purchase section of the programme should not be ignored.
Ryan said: “I am disappointed Treasury is choosing to de-emphasize the asset purchase portion of the Tarp programme. Based on my experience with the Resolution Trust Corporation, I believe a key ingredient to a strong recovery is the creation of price discovery through some type of transparent purchase programme. Until we have a functioning marketplace – where buyers and sellers agree on prices and institutions can subsequently judge the value of the assets they hold – uncertainty could keep many financial players on the sidelines, restricting lending capital for the larger economy. Treasury is uniquely positioned to bring these buyers and sellers together.”
He added the hope that the incoming Obama administration may take heed of his warning: “Understandably, Treasury has both limited time and resources and must make hard choices. But as we move forward, and in planning for the next administration, we hope there will be further opportunities to comprehensively revisit this important programme.”