The Treasury Department wants to move ahead with its Public-Private Investment Program (PPIP) for toxic mortgage assets while it solicits public comment on a rule that would exempt the asset managers from federal compensation restrictions.
Treasury is seeking private asset managers to put up capital and invest with the federal government in purchasing toxic assets from banks.
Treasury secretary Timothy Geithner told the Troubled Asset Relief Program (TARP) Congressional Oversight Panel that he does not believe the compensation restrictions that apply to banks receiving capital infusions from the TARP should be applied to the PPIP program, despite pressure from some congressional critics.
The secretary also indicated that the compensation issue needs to be resolved before the program is up and running. "You can't feel more strongly than me about the need for clarity," Geithner told the oversight panel. Treasury will issue the compensation rule in a "couple of weeks," he added.