The latest draft of the $700 Billion bank bailout was released this afternoon. Here’s the draft-of-bailout-plan-september-28-2008, which has yet to be passed into law.
The informal but somewhat urgent deadline for passage was 6 pm Eastern time, so that it was released prior to the opening of the Asian markets. As of 7 pm Eastern (the time of this writing), it does not appear that the plan has been finalized.
Key elements of the plan include:
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As reported earlier this week, the $700 billion would be disbursed in stages, with $250 billion made available immediately for the Treasury’s use.
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Curbs will be placed on executive compensation plans for executives at companies that sell mortgage assets to Treasury. These include a $500,000 limitations on the tax deductibility of executive salaries for companies that participate in the plan.
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An oversight board will be created, which will include the Federal Reserve chairman, the Securities and Exchange Commission chairman, the Federal Home Finance Agency director and the Housing and Urban Development secretary.
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The Treasury is allowed in certain situations to exercise an option to take ownership stakes in participating companies.
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Treasury may establish an insurance program to guarantee certain assets for companies purchased prior to March 14, 2008. These assets include certain mortgage-backed securities.
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Another provision requires the president to propose legislation to recoup losses from the financial industry if the rescue plan results in net losses to taxpayers five years after the plan is enacted.
More details will be posted as they become available.
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