Geithner tackles ‘legacy assets'

By Krishna Guha in Washington
The plan announced yesterday by Tim Geithner, US Treasury secretary, sets out to deal with “legacy assets” from the bubble years that are clogging up bank balance sheets, creating uncertainty about the solvency of financial institutions and deterring new lending.
It aims to do so by providing mechanisms to price these assets and to remove some of them from bank balance sheets. The hope is that this will reduce uncertainty as to the true financial position of the banks, enabling them to raise more capital from the private sector.
This would lessen the need for the government to recapitalise the banks with public capital.
The Geithner approach reflects the view that fixing the banking system will require policies that target both bank assets and bank capital. Yesterday's announcement should be thought of as a complement to the plan to stress-test banks and provide capital insurance in the form of standby government equity.
Mr Geithner's predecessor, Hank Paulson, twice tried and failed to deal with toxic assets. These efforts foundered largely because of problems over pricing and financing of asset transfers. Mr Geithner's plan relies on private sector co-investors to price toxic assets, but more than 90 per cent of the total financing will come from the government sector.
Treasury is leaning heavily on the Federal Reserve and Federal Deposit Insurance Corporation to augment its limited funds because these agencies do not need Congressional approval to commit funds.
The private sector co- investors will have “skin in the game”, in market parlance. But the economic positions of the government and its partners are not symmetrical, since the government is providing its own leverage and the private investors are not.
While earlier legacy asset strategies focused exclusively on toxic securities, this plan is more expansive, targeting legacy loans as well, reflecting the broad deterioration in portfolios.
To tackle toxic securities, the government will create up to five joint ventures, providing a dollar of equity and a dollar of Treasury loans for each dollar of private capital raised. These funds will go out and bid for assets in the market.
The Fed will, meanwhile, offer financing for legacy assets – potentially including formerly triple A-rated subprime securities. It will demand risk capital from Treasury and via “haircuts” on loans.
To tackle problem loans, the government will create a marketplace where banks can offer pools of loans for auction. Authorised investors will prequalify for dollar-for-dollar government equity and up to six times leverage guaranteed by the FDIC.
The scheme should help clarify the degree to which current depressed prices of traded securities reflects liquidity risk premium – absence of financing – as opposed to expected credit losses. The plan could reveal that the liquidity risk premium was large and the capital hole in the banks is not as great as feared. Or it could show that the liquidity risk premium was not that big and the capital hole is, indeed, great.
Crucial questions remain unanswered, above all on loan pricing. Mr Geithner said pricing would be more favourable than under today's distressed conditions, but less favourable than under normal market conditions.
Moreover, would-be partners from the private sector might be deterred by the risk of being hauled before Congress if they make large profits. Mr Geithner said yesterday that private partners needed “clear rules of the road”. But he can provide only limited assurances with respect to future action by Congress.
Pricing problems remain. Many toxic securities are complex and embed fraud. Some are so idiosyncratic that discovering a price for one may not help much in valuing another notionally similar security. Banks may not be willing to part with loans that have not been heavily written down at prices that prevail in the FDIC-backed auctions.
In addition, the $500bn to $1,000bn scheme is still small relative to the size of asset markets. Unless credit conditions ease considerably, the price levels established under these schemes will be sustained only by continuing access to lower-cost government finance.
The current programme will be able to remove only a relatively small portion of legacy assets from banks. So banks will still be exposed to further deterioration in their portfolios.
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盖特纳为美国资产“消毒”
作者：英国《金融时报》克里什纳•古哈(Krishna Guha)华盛顿报道
美国财长蒂姆•盖特纳(Tim Geithner)日前公布的计划，将着手应对泡沫时代形成的“遗留资产”，这些资产如今充斥着银行的资产负债表，给金融机构的偿付能力带来了不确定性，并阻碍了新贷款的发放。
该计划旨在通过提供一些为这些资产定价的机制、并将部分资产从银行资产负债表上移除，来实现上述目标。盖特纳希望该计划能降低银行真实财务状况方面的不确定性，使其能够从私人部门筹集更多资金。
这将减轻政府利用公共资金对银行进行资本重组的需要。
盖特纳的方式反映了这样一个观点：即修补银行业体系需要的是同时针对银行资产和银行资本的政策。昨日公布的计划，应该被认为是对银行进行压力测试和以备用政府股本的形式提供资本担保计划的补充。
盖特纳的前任汉克•保尔森(Hank Paulson)曾经两次尝试处理有毒资产，但均以失败告终。这些努力失败的主要原因，在于资产转移的定价和融资问题。盖特纳的计划依靠私人部门的共同投资者对有毒资产进行定价，但90%以上的资金都将来自于政府部门。
财政部将高度依赖美联储(Fed)和联邦存款保险公司(FDIC)，以补充其有限的资金，因为上述机构调配资金无须经国会批准。
用市场行话来说，私人部门的共同投资者将处于一种类似于高管内幕交易的形势。但政府和其合作者的经济立场并不是对等的，因为政府能够提供自身的杠杆作用，而私人投资者不能。
先前的遗留资产策略只关注于有毒证券，而目前这项计划的涉及面更广——它同时针对遗留贷款——反映出资产组合状况的普遍恶化。
为了处理有毒证券，美国政府将创立至多5家合资企业，每筹集到1美元的私人资本，就会提供1美元的股本和1美元的财政部贷款与之匹配。这些基金将会进入市场竞购资产。
与此同时，美联储将为遗留资产提供融资——可能包括以前评级为AAA级的次级证券。这将要求来自于财政部以及通过贷款减记方式提供的风险资金。
为了解决问题贷款，政府将会创设一个交易市场，供银行对贷款池进行拍卖。得到认可的投资者将有预先获得一美元换一美元政府股本、以及联邦存款保险公司提供的至多6倍杠杆率担保的资格。
该计划应有助于说明被交易证券目前被压低的价格在多大程度上反映了相对于预期信贷损失的流动性风险溢价——融资渠道的匮乏。该计划可能会表明，流动性风险溢价很高，而银行的资本空洞(capital hole)并不像我们所担心的那么大；或者，它可能表明：流动性风险溢价并不那么高，而资本空洞的确很大。
仍有一些关键问题尚未得到解答，首先就是贷款定价问题。盖特纳表示，与目前令人沮丧的市场环境下的定价相比，届时的定价情况会有利一些，但还比不上正常市场环境下的定价情况。
此外，私人部门有意合作的投资者面临这样的风险：如果他们获得了高额利润，可能会落到国会手中，这种风险可能令他们却步。盖特纳昨日表示，私人合作者需要“明确的规则”。但对于国会未来的行动，他也只能提供有限的保证。
定价问题仍然存在。许多有毒证券非常复杂，而且存在欺诈行为。有些证券如此特殊，以至于一种证券价格的发现，可能对另一种理论上类似证券的定价没多大帮助。银行可能不愿意将价格尚未被大幅减记，在由联邦存款保险公司支持的拍卖中受欢迎的贷款剥离出去。
此外，相对于资产市场的规模来说，5000亿至1万亿美元的方案还是太小。除非信贷环境有了明显松动，否则，要想维持根据这些计划确立的价格水平，只能通过持续获得低成本的政府融资。
目前的计划将只能将银行遗留资产中相对较小的一部分移除。因此，银行还将面临投资组合进一步恶化的风险。
译者/董琴
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