The government (partaker, pusher, rescuer, stander-by)
President of America (stander-by)
Role: signed the bailout plan approved by Congress
Fault: lacked solution and leadership in the face of crisis
Representative: George W. Bush, whose tenure is coming to an end
Department of the Treasury (potential rescuer)
Role: may have salvaged the American economy
Solution: drew up a 700 billion dollars bailout plan and injected the money into banks after the plan was approved by Congress
Person: Henry Paulson, the most powerful secretary of the treasury in US history; if his plan does indeed work he will be hailed as the “savior” of Wall Street.
US Department of Housing and Urban Development (pusher, partaker)
Role: ensuring more people owned their own homes, and supporting the development of communities, trying to eliminate racism in the distribution of affordable houses.
Fault: encouraging home-loan mortgage corporations such as Fannie and Freddie to offer and purchase large amounts of secondary mortgage loans to help more and more people, especially low-and-medium wage earners, realize their “American Dream”.
Person: John Weicher, assistant secretary for housing of the Federal Housing Commission. He urged Fannie and Freddie to be more proactive in offering loans to low-and-medium wage earners despite the warning from his department that foreclosures were rising rapidly.
Federal Housing Financial Agency (rescuer)
Role: supervising Fannie and Freddie
Solution: increasing house buyers’ available credit by taking over the business of Fannie and Freddie.
Person: Chairman Ronald A. Rosenfeld
Federal Deposit Insurance Company (rescuer)
Role: offering insurance to banks and other deposit institutions, maintaining the confidence of the public and safeguarding the financial system.
Solution: encouraging banks to change housing loans with repayment problems into affordable mortgage loans, offering a series of guarantee schemes to financial institutions and is in favor of raising the bank threshold of loans secured by deposits.
Person: Chairperson Sheila Bair
Federal Reserve (pusher, rescuer)
Role: central bank of America
As pusher:
Fault: creating a relaxed credit environment by slashing interest rates, leading to bubbles in both the housing and secondary mortgage loan markets. The Fed also trusted financial institutions to manage risk properly, which was afterwards proved to be a huge mistake.
Person: former Chairman Alan Greenspan, the “greatest ever governor of the central bank” lost his long-held reputation as a result of this crisis.
As rescuer:
Solution: injecting 900 billion dollars into banks and offering loans to enterprises, prepared to reduce interest rates.
Person: Ben Bernanke, Paulson’s close comrade in the fight against the crisis.
Securities and Exchange Commission (partaker, pusher)
Role: enforcing Federal Securities Law and regulating behavior of financial institutions
Fault: its loose supervision of markets encouraged financial institutions to act without any proper regard for authority.
Person: Chairman Christopher Cox. He was criticized by people from all circles and his resignation was demanded by the presidential candidate of the Republican Party John McCain.
( China.org.cn via Global Entrepreneur November 13, 2008)
