Even as policymakers worked on details of a $700 billion bailout of the financial industry, Wall Street began looking for ways to profit from it.
Financial firms were lobbying to have all manner of troubled investments covered, not just those related to mortgages.
At the same time, investment firms jockeyed to oversee all the assets that Treasury plans to take off the books of financial institutions, a role that could earn them hundreds of millions of dollars a year in fees.
The scope of the bailout grew over the weekend. As recently as Saturday morning, the Bush administration's proposal called for Treasury to buy residential or commercial mortgages and related securities. By that evening, the proposal was broadened to give Treasury discretion to buy “any other financial instrument.”
The lobbying became particularly intense because Congress plans to approve a package within just two weeks, without the traditional hearings and committee process.
Each part of the financial industry is pursuing its own interests.
Small banks, for example, are pushing the government to buy loans they made to home builders and commercial developers.
Wall Street banks are lobbying to temporarily suspend certain accounting rules to avoid taking big losses on the assets they sell to Treasury.
Some private equity firms may be interested in pursuing an asset-management assignment from the government, people briefed on the matter said. That raises complications because those firms hold assets similar to the ones the Treasury plans to buy. Democrats suggested Sunday that a provision be added to avoid any conflicts of interest, with a firm making money from handling assets like its own.
Congressional Democrats and advocates of low-income homeowners were also pushing for the direct acquisition of loans.