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From: Government Bytes
Posted by Demian Brady - October 04, 2008
The Washington Post reports on Paulson's likely choices to manage the bailout's implementation, and lo and behold, the same people who were involved in the investment banks' decisions to pour money into the now toxic mortgage-based securities will be the Secretary's go-to-guys. After all, they are the experts.
Speculation was rampant on Wall Street yesterday about who Treasury would hire to manage the assets that the government plans to buy. Industry sources say the department has asked leading Wall Street firms for feedback and that Legg Mason, Pimco, BlackRock and MKP Capital Management were recommended to Treasury.
These firms rose to the top of the list because of their expertise in mortgage-related assets. But hiring them as asset managers for the government would raise the potential for conflicts of interest, particularly because they would be managing the assets while also selling their own troubled securities to the government.
But rest assured, Treasury "plans to develop and publish guidance on 'how to manage any conflicts.'"
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