PCI has obtained input from members, has been engaged in continuous dialogues with the White House, Treasury Department and Congressional leaders, and has sent a letter to ranking members of the Senate Banking, Housing, and Urban Affairs Committee and the House Financial Services Committee urging prompt passage of the rescue plan. In addition, PCI stressed that the rescue plan should be applied fairly to all segments of the financial services industry. The rescue package must ensure equitable treatment to ensure that no companies are put at a severe competitive disadvantage.
PCI Members Participated in a Treasury Asset Rescue Plan Conference Call
PCI Members participated in a conference call with PCI's Leadership Team on Thursday, September 25 to discuss the Treasury Asset Rescue Program. PCI’s Leadership Team conveyed information gathered from recent discussions with officials at the White House and the U.S. Department of Treasury. Member company CFOs and other participants had an opportunity to discuss the Treasury proposal and share feedback on the issues in play.
The current legislative draft would authorize Treasury to purchase up to $700 billion in mortgage-related assets over the next two years from financial institutions headquartered in the United States. The terms and conditions would be at the Treasury’s discretion, as would any mechanism to manage and resell those assets. While Congressional leaders have expressed discomfort with the lack of plan detail, particularly regarding how Treasury determines which assets to purchase, they are moving quickly to enact legislation before adjournment.
The PCI conference call included a brief discussion of the following issues:
* PCI’s potential commitment to ensuring enactment of rescue legislation.
* The need to include insurance industry experts in any Treasury purchasing group and oversight board.
* Equitable treatment of insurers in any rescue plan.
* Concerns about proposals to require an industry assessment or premium in return for relief targeted towards investors.
* The likelihood of caps on executive compensation for firms seeking relief.
* The possibility of changes in accounting rules for valuing assets with no current market.
* The Senate proposal to create a facility to support money market funds in return for a small premium.
* The possibility of changing the treatment of Fannie/Freddie preferred stock.
* The effort by the New York Insurance Department to more broadly regulate credit default swaps.