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Monday, March 16, 2009

US will fix banks, win 'economic war': Officials

President Barack Obama's economic advisors denied Sunday they were moving too slowly to fix the stricken US banking industry, and insisted victory would come in the "economic war."

"On the financial rescue, we have done a tremendous amount," Christina Romer, chairwoman of the White House Council of Economic Advisers, said on NBC program "Meet the Press."

"It is an economic war. We haven't won yet. We have staged a wonderful battle," she said, adding that a proposal from Treasury Secretary Timothy Geithner to clean out banks' bad loans would "come out very soon."

Lawrence Summers, director of Obama's National Economic Council, said the administration would Monday present a program of cooperation between the Small Business Administration and banks.

That would "increase the flow of credit to small business, which is a crucial place where we've been lacking credit. And that's been one of the contributors to unemployment," he said on CBS's "Face the Nation."

"And we're getting a much closer and better reading on the situation of the banks through the stress tests that are an integral part of Secretary Geithner's financial plan," Summers said.

"The president and Secretary Geithner have laid out the framework. And I'm very confident that, before too long, we'll see the details of the plan emerge."

Analysts say US banks are sitting on at least two trillion dollars of toxic assets, mainly linked to troubled US mortgages, and that these must be wiped off their books for the banks to resume lending.

The Daily Star



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