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"We can expect that we're going to have to do more to shore up the financial system," Obama said in an interview with NBC News that aired Monday. Treasury Secretary Timothy Geithner plans to announce a new framework for rescuing the financial sector in a speech next week. The plans will focus on how to use the remaining $350 billion in the $700 billion Troubled Asset Relief Program that Congress approved last fall. It will include new programs aimed at helping homeowners stave off foreclosure, and efforts to stabilize the banking sector. Officials are considering setting up a government-run "bad bank" to take on the bad debts and investments of financial institutions. In addition, the Treasury could seek help from the Federal Reserve and the Federal Deposit Insurance Corp. to provide banks with guarantees against losses on assets backed by residential and commercial real estate loans, as it did with Citigroup in November. "We're going to have to wring out some of these bad assets," Obama said. Meanwhile, Senate Republicans sought to ease the clogged credit market by proposing to give banks an incentive to make loans at rates between 4 percent and 4.5 percent. They offered the plan as part of an alternative to a Democratic economic recovery proposal.
[Associated
Press;
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