Heat Treat Industry News

April 04, 2008

Treasury's Steel Says Fed Deserves Praise for Bear Stearns Response

14:06 04/03 (CEP News) Washington – The Federal Reserve deserves praise for its response to the liquidity problems at Bear Stearns, which was necessary and appropriate to maintain stability in the U.S. financial system, a Treasury official said Thursday.

Treasury Undersecretary Robert Steel, in testimony before the Senate Banking Committee, said the Fed's action on the Bear Stearns crisis was not about the specific institution, but a matter of strategic concern for the implications of a major bankruptcy.

"The failure of a firm that was connected to so many corners of our markets would have caused financial disruptions beyond Wall Street," he said in his prepared testimony.

Speaking on behalf of Secretary Henry Paulson, who is in China, Steel said the Treasury Department supports prudent action to mitigate systemic risk, enhance liquidity, facilitate more orderly markets and minimize risks to taxpayers.

"Recent events underscore the need for strong market discipline, prudent regulatory policies, and robust risk management," he said.

"It took a long time to build up the excesses in our markets, and we are now working through the consequences," he said. "Market participants are adjusting, making disclosures, raising capital and re-pricing assets."

The Treasury continues to work with regulators to limit further spillover effects and restore financial markets, Steel said.

In response to questions from Senators, Steel said that from the Treasury's perspective, there were two major concerns in putting together the JPMorgan acquisition of Bear Stearns: it's effect on the markets and the stewardship of U.S. taxpayers funds.

Streel noted there are signs of market improvement and said market healing is about transparency, liquidity and capital. "That's the trifecta that will bring back market," he said. "Greater transparency is really the key for investors."

By Patrick McGee, pmcgee@economicnews.ca, edited by Steve Campbell, scampbell@economicnews.ca and Stephen Huebl, shuebl@economicnews.ca

------------------------------------------------------------
April 03, 2008

New Flamer Boasts Greater Efficiency and Safety.

For more information on our services, please contact us via e-mail

Robert Gutierrez - RGutierrez@HoustonHeatTreat.com
Mark Tate - Sales or Technical assistance - MTate@HoustonHeattreat.com

or call us at 281-590-9600.