Inquiring minds are verifying the above in the Bailout Bill Resolution Draft. Here is the language under discussion.
SEC. 112. COORDINATION WITH FOREIGN AUTHORITIES
AND CENTRAL BANKS.
The Secretary shall coordinate, as appropriate, with foreign financial authorities and central banks to work toward the establishment of similar programs by such authorities and central banks. To the extent that such foreign financial authorities or banks hold troubled assets as a result of extending financing to financial institution that have failed or defaulted on such financing, such troubled assets qualify for purchase under section 101.
SEC. 101. PURCHASES OF TROUBLED ASSETS.
8 (a) OFFICES; AUTHORITY.—
9 (1) AUTHORITY.—The Secretary is authorized to establish a troubled asset relief program (or ‘‘TARP’’) to purchase, and to make and fund commitments to purchase, troubled assets from any financial institution, on such terms and conditions as are determined by the Secretary, and in accordance with this Act and the policies and procedures developed and published by the Secretary.
SEC. 112. COORDINATION WITH FOREIGN AUTHORITIES
4 AND CENTRAL BANKS.
The Secretary shall coordinate, as appropriate, with foreign financial authorities and central banks to work toward the establishment of similar programs by such authorities and central banks. To the extent that such foreign financial authorities or banks hold troubled assets as a result of extending financing to financial institutions that have failed or defaulted on such financing, such troubled assets qualify for purchase under section 101.
That’s better!
There have been several casualties in Europe as a result of the US subprime crisis. Of course, places like Spain, Ireland and the UK have created their own mess, and due to the international nature of finance many banks share the same sheets over this. I would imagine bail outs that extend to banks based on foreign shores is to protect US interests, and avoid lengthy litigation battles.
The Irish government has recently made a bold move to guarantee all deposits of its major banks. It can’t actually afford to do this, but if one bank defaults the insurance kicks in. The Irish government insists this is not a bail out, but is key to stabilizing the banking industry in Ireland. With banks like Anglo Irish offering up to 5% on the US dollar savings accounts, plus a government guarantee that makes Ireland one of the best places to put you money.
