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Making Sense of the Aggregator Bank

Lawrence M. Ausubel () and Peter Cramton ()
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Lawrence M. Ausubel: Economics Department, University of Maryland, http://www.econ.umd.edu

Papers of Peter Cramton from University of Maryland, Department of Economics - Peter Cramton

Abstract: On Tuesday, 10 February 2009, Treasury Secretary Geithner proposed the aggregator bank (“public-private investment fund”) as a key instrument to resolve the financial crisis (www.financialstability.gov). The Treasury description leaves many issues unanswered. Here we explain how an aggregator bank might operate in practice. We fill in some of the major details so as to enhance the effectiveness of the aggregator bank. In particular, the approach emphasizes transparency and value to the taxpayer, minimizing the need for bank-by-bank negotiations and thereby minimizing the opportunities for the government to play favorites.

Keywords: Auctions; financial auctions; financial crisis (search for similar items in EconPapers)
JEL-codes: D44 G01 G21 (search for similar items in EconPapers)
Pages: 4 pages
Date: 2009, Revised 2009
New Economics Papers: this item is included in nep-ban
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Published in The Economists' Voice, 6:3, www.bepress.com/ev/vol6/iss3/art2, February 2009

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Persistent link: https://EconPapers.repec.org/RePEc:pcc:pccumd:09msab

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