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Utah bankers'association president briefs Senate on Treasury's mortgage-asset swap, calls it an "asset swap," not a bailout
Summary
Howard Headley, president of the Utah Bankers Association, told the Utah Senate the Treasury's proposed program would swap short-term treasuries for long-term mortgage-backed securities to restore liquidity; he described it as an asset swap at discount rather than a bank bailout and said most Utah FDIC banks did not hold the toxic securities.
Howard Headley, president of the Utah Bankers Association, briefed the Utah State Senate during a Committee of the Whole session on the Treasury Department's plan to address the mortgage market turmoil.
22My name is Howard Headley. I'm the president of Utah Bankers Association,22 Headley said, and he distributed written materials to senators before explaining the proposal.
Headley said the core problem is that mortgages had been packaged into mortgage-backed securities and traded as liquid assets. When a small share of those mortgages proved to be "toxic" 'performing only if home prices continued rising'investors stopped buying the securities and the secondary market effectively dried up. Firms holding those securities were forced by accounting…
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