Momentum is picking up for the US to form a Resolution Trust Corp-like vehicle to absorb assets from failed banks and financial services firm. McCain apparently is beginning to promote the idea as are others in Washington. This would help clean up bank balance sheets and transfer risk to the government who would then liquidate the assets over time. It was done during the Great Depression and again during the 1980s&90s.
Just crossing the wires is news that Putnam, the big Boston fund manager, has closed an institutional money market fund. The fund did not “break the buck”, or trade below its fixed $1 share price, Putnam says. This is helping revive credit concerns after a tiny respite.