they be subject to any pay restrictions?
SECRETARY GEITHNER: I’m going to answer this carefully. The basic answer is no. If you’re already an institution that’s received TARP assistance, then you would be covered by the conditions — the range of conditions that will apply to people who receive capital from the government.
But these programs are different programs. These are generally available programs. They’re designed — like our housing plan, like the small business plan — to get these broader markets working again. And for those reasons the comp conditions will not apply to the asset managers and investors in the program.
Q Are you concerned about a backlash from AIG in making that decision?
SECRETARY GEITHNER: No, this was a judgment that — that broad strategy approach has been at the core of our strategy from the beginning. It was clear in the proposals the President laid out on February 4th. It underpins the subsequent comp conditions that were passed as part of recovery too, and I think there’s really broad support for that judgment.
Yes.
Q Thank you. What happens if you go to all this trouble to figure out how much the FDIC is going to offer, in terms of leverage, and get all this together, have the auction, the price comes in, and the bank says, we don’t like that price, we don’t want to hand over?
SECRETARY GEITHNER: Well, again, you can’t know for sure how much participation you’re going to get, and people get a chance to sort of assess what the balance is for them. And the incentives banks face are very — you know, right now, again, you don’t really have a viable market in which to unload and sell these assets. But because you’re holding on to them, it is harder for banks to generate greater confidence among their creditors and their investors; it’s harder for them to raise capital privately.
So they face a balance. This will make it easier for them to raise capital privately because they’ll have a cleaner balance sheet; there will be more confidence in the — externally, people’s capacity to evaluate their risk in that context. And that will help induce participation, as well.
But as I said, you know, in financial crises, people always want the government to take more risk, or try to put more of the losses on the balance sheet of the government. And we’re trying to find a balance that’s better for the taxpayer.
Q How long do you think it’ll take to get these things up and running? I mean, it seems like there’s a lot of evaluation required by the FDIC and by the banks and by the investors before you could have an auction like this.
SECRETARY GEITHNER: Well, again, the full — all the financial agencies that are relevant to this are going to work very hard to put it in place as quickly as possible.
One of the great virtues of this is it builds off an established mechanism. The FDIC has a lot of experience in operating and running, and they’re