The Obama administration has decided on a new package of aid measures for the financial services industry, including a bad bank component, and is expected to announce it next Monday, according to a source familiar with the planning.
Though government sources told CNBC that nothing has been decided, Reuters, citing a Treasury Department official, reported Secretary Timothy Geithner would unveil a plan Monday.
The plan will be “smaller” than originally expected, said the industry source, and centered around government guarantees and insurance of troubled assets””what’s called a “ring fence” concept.
“Everybody seems to like that,” said the source. “There’s a lot of internal conflict about whether this [the bad bank] makes sense … they realize they have to do something with the bad bank.”