by Treasury, if that’s a possibility at all?
SECRETARY GEITHNER: We’re taking a careful look at it.
Q Could you repeat the question?
SECRETARY GEITHNER: The question is — I believe is, a number of members of Congress, governors, elected officials across the country, have encouraged us to explore ways to help bring about further improvements in the muni market. There has been some improvement in the muni market and we are looking at a range of options to see if we help reinforce those improvements, including the specific measures that Chairman Frank and others are considering.
Q Tim, obviously you set out the structure and framework today, but for good reasons you haven’t delved into the pricing. The pricing on which you make finance available to the private sector will obviously be crucial for understanding how this is likely to affect asset prices and, indeed, then the stock prices and capital needs of banks. Can you at least give us in conceptual terms some indication of what will guide the pricing decisions here on the loans?
SECRETARY GEITHNER: All right, two basic pricing things are at issue here. One is how the price for the assets is established. And the principal — a principal virtue of this mechanism is to use the financial interests of investors to help set the price. Because they have money at risk, they’re going to make better judgments about how to set the price of these assets than the government could hope to make.
There’s a second issue about the terms of the financing the government makes available, and let me just establish a basic principle there too. As you see across the range of things that the Federal Reserve has done over the past two years, one basic principle that’s important is to say that you establish the pricing so that as conditions normalize, the market will no longer want to or find it economic to rely on financing from the government.
Basic principle underpin all the things the Fed has done and that’s why you see in some parts of the Fed programs, the Fed balance sheet is shrinking even though we have a financial system so under acute pressure.
Q Have you gotten any interest from the private sector in getting involved in this program?
SECRETARY GEITHNER: We have seen and I expect to see a lot of interest from the private sector.
Q Can you give us any names?
SECRETARY GEITHNER: But, you know, just to say — just to make a point. You’re going to have people — this is true of any financial crisis — who want the government to take on much more risk. So there are people who say that we’d like the government to take more risk or a greater share of the losses than this program identifies or anticipates. But I think you’re going to see a fair amount of interest in this.
Q Yes, on the executive pay parts of this, the plan is to have passive investors not subject to that. But what about the asset managers? Will