9/26/08

Client Alert: Financial Crisis Update 2

Related Practices

House and Senate negotiators appeared to have reached an agreement with the Bush Administration on the content of bank bailout legislation yesterday, but the prospects that legislation would be enacted before the markets open on Monday were dealt a very serious blow when conservative House Republicans introduced an alternative approach during a meeting with President Bush at the White House late in the afternoon.

At midday Thursday, House and Senate negotiators announced a four-part agreement on principles for the bailout legislation:

When House and Senate negotiators met with congressional leaders and President Bush at the White House late yesterday afternoon to discuss the agreement on principles, however, conservative House Republicans proposed an entirely different approach to the illiquidity problem based on a combination of mortgage insurance and tax incentives for private investors.  The House Republicans proposal contained six elements:

The announcement of the conservative House Republican proposal brought the White House meeting to an abrupt end.  Treasury Secretary Paulson met with House and Senate negotiators late into the evening to assess the conservative House Republican proposal. Negotiations were scheduled to begin again this morning.  Prospects for enactment of any legislation today or over the weekend are uncertain at best.

Click here for Financial Crisis Update 1

Click here for Financial Crisis Update 3

Click here for Financial Crisis Update 4

This communication is for general information purposes only and does not constitute a full legal analysis of the subject matter discussed herein. The information in this email should not be relied upon as specific legal advice.