New Treasury Secretary Timothy F. Geithner rolled out his first initiative Tuesday, and it was a doozy. Geithner proposed to double down on the much-maligned $700-billion Troubled Asset Relief Program, injecting up to $2 trillion in public and private money into the beleaguered financial system. The plan he offered would address some of the biggest weaknesses of the previous effort, bringing long-overdue transparency to the government's attempts to bolster banks and targeting more factors in the credit crunch. Still, with too few details about how the new program would create a market for banks' distressed assets and avert more foreclosures, we remain wary of its risks and effectiveness.
Having said that, we welcome much of the thinking behind this ambitious plan. It's comprehensive, tackling not just the balance-sheet problems that are weakening banks but the rise in mortgage defaults, the credit shortages in various markets and the public's disenchantment with the rescue efforts. It tries to bring private dollars into the mix, instead of relying solely on taxpayer funding. And it has all four federal agencies that regulate financial institutions working from a common script as they evaluate the condition of banks, thrifts and other lenders. In contrast to the Bush administration's scattershot approach to the problem, this effort seems like a sustained barrage.
