The Obama administration on Wednesday pledged to increase transparency in the government's $700billion financial rescue program and said that bigger changes were in the works.
But Treasury Secretary Timothy Geithner said the administration did not believe that nationalizing the banking system was the solution to the worst financial crisis since the 1930s.
“We have a financial system that is run by private shareholders (and) managed by private institutions and we would like to do our best to preserve that system,” he said in response to a reporter's question.
Geithner said the administration plans to post all contracts with banks getting financial support on the Treasury Department's Web site within five to 10 days of reaching the agreement. The department, which is managing the bailout program, also will work quickly to post previous contracts online as well, he added.
Geithner also told reporters that the administration is planning an even bigger overhaul of the bailout program which he said would be announced “relatively soon.”
The administration is considering a range of options for how to change the program, Geithner said. Previously, he has said that creation of a bad bank to buy up toxic assets now weighing down the banking system was one of the options on the table.
Geithner made his comments at the beginning of a meeting of officials overseeing the operation of the bailout, including Elizabeth Warren, the head of a congressional oversight panel created in the legislation establishing the program.
The rescue effort has come under heavy attack for how it was operated during the Bush administration. Critics say the decisions were veiled in too much secrecy and the former administration did not impose enough restrictions to make sure banks used the billions of dollars they were receiving to increase lending.
Geithner said making full contracts available online was the first of many changes to improve the program.
“In the coming weeks, we will unveil a series of reforms to help stabilize the nation's financial system and get credit flowing again to families and businesses,” Geithner said.
The Bush administration handled the first $350 billion of the rescue program under the direction of former Treasury Secretary Henry Paulson. His operation of the program drew heavy criticism from lawmakers and the oversight panel for not being transparent and for failing to attach enough conditions to ensure that banks receiving support used the money to increase lending to consumers and businesses.
Along with the new lobbying rules, the administration of President Obama has pledged to better track lending patterns by financial institutions to ensure that they are using the government assistance to increase lending. The new administration also has sought to limit executive compensation at institutions receiving government support and prevent shareholders at those companies from benefiting at taxpayers' expense.