RIVERWOODS, Ill., Oct. 6 IL-CCH-WhitePapr-Gov
RIVERWOODS, Ill., Oct. 6 /PRNewswire/ -- CCH, part of Wolters Kluwer Law &
Business, has published a white paper, The Economic Bailout: An Analysis of
the Economic Emergency Stabilization Act
(http://www.cch.com/Press/news/CCHWhitePaper_Bailout.pdf), by CCH banking law
analysts Katalina M. Bianco, JD and John M. Pachkowski, JD. Wolters Kluwer
Law & Business is a leading provider of research information and software
solutions in key specialty areas for legal and business professionals
(business.cch.com).
President Bush signed the Emergency Economic Stabilization Act of 2008, or
EESA, into law within two hours of its final passage in the House of
Representatives on October 3, 2008, and declared that the legislation was
"essential to helping America's economy weather this financial crisis."
The law provides the Treasury Department up to $700 billion to purchase,
manage and sell assets held by financial institutions that are considered to
be "troubled" or "toxic," under a program known as the Troubled Asset Relief
Program, or TARP.
The CCH white paper includes a compelling timeline, counting down key
events from the takeover of Fannie Mae and Freddie Mac on September 7 to the
original "bailout" plan by Treasury Secretary Paulson put forward on September
23.
The original plan was extensively elaborated and modified as it was cast
into legislative language, then rejected by the House on September 29 and
finally, after being packaged with an array of tax provisions and a raising of
the FDIC insurance limits, was passed into law.
White Paper Details Taxpayer Protection, Oversight
The white paper details the many layers of taxpayer protection in the TARP
program, including prohibitions on unjust enrichment and obtaining maximum
return for the federal government. The Treasury Secretary will be required to
protect taxpayers by using market mechanisms, namely purchasing assets at the
lowest price and using auctions or reverse auctions to maximize taxpayer
resources.
Multiple layers of oversight are also called for in the law. It
establishes a Financial Stability Oversight Board and a Congressional
Oversight Panel. The Treasury Secretary is required to disclose descriptions,
amounts and pricing of assets acquired under the TARP and judicial review of
the program is authorized.
"This is quite a change from the first Treasury Department proposal, in
which the asset purchase program had no oversight provisions," white paper
co-author Pachkowski noted.
The white paper also examines a number of compensation-related provisions
in the new law, involving incentive compensation, claw-back provisions and
golden parachutes.
The white paper concludes by looking at some of the potential difficulties
facing the program.
"The complexity of some of the securities, and the difficulty of
accurately valuing them, could be a stumbling block to the law's intended goal
of stabilizing the economy," white paper co-author Bianco observed.
About the Authors
Katalina M. Bianco, JD, is a banking law analyst and editor of the CCH
newsletter, Subprime, Mortgage, and Securitization Law Update. She also
contributes to the CCH Federal Banking Law Reporter, CCH Mortgage Compliance
Guide and Bank Digest.
John M. Pachkowski, JD, is a banking law analyst and contributor to the
CCH Federal Banking Law Reporter and Bank Digest. Pachkowski is the author of
Anti-Money Laundering and Bank Secrecy: Compliance and the USA PATRIOT Act,
and co-author of the CCH Financial Privacy Law Guide.
About Wolters Kluwer Law & Business
Wolters Kluwer Law & Business is a leading provider of research products
and software solutions in key specialty areas for legal and business
professionals, as well as casebooks and study aids for law students. Its major
product lines include Aspen Publishers, CCH, Kluwer Law International and
Loislaw. Its markets include law firms, law schools, corporate counsel and
professionals requiring legal and compliance information. Wolters Kluwer Law &
Business, a unit of Wolters Kluwer, is based in New York City and Riverwoods,
Ill.
Wolters Kluwer is a leading global information services and publishing
company. The company provides products and services globally for professionals
in the health, tax, accounting, corporate, financial services, legal and
regulatory sectors. Wolters Kluwer has annual revenues (2007) of €3.4 billion
($4.8 billion), maintains operations in over 33 countries across Europe, North
America and Asia Pacific and employs approximately 19,500 people worldwide.
Wolters Kluwer is headquartered in Amsterdam, the Netherlands. For more
information, visit http://www.wolterskluwer.com.
SOURCE CCH, part of Wolters Kluwer Law & Business
