Nov 4 (Reuters) - The U.S. Treasury Department is considering using more of its $700 billion rescue fund to buy stakes in a broad range of financial companies, not just banks and insurers, after tentative signs of the program’s success, the Wall Street Journal said, citing people familiar with the matter.
In focus are companies that provide financing to the broad economy, including bond insurers and specialty finance firms such as General Electric Co’s (GE.N) GE Capital unit, CIT Group Inc (CIT.N) and others, the people told the paper.
Treasury may also scrap part of its early plan of purchasing assets through an auction process and instead purchase some distressed assets directly, the paper said citing people familiar with the matter.
“We are looking at many ideas for strengthening the financial system and for restoring lending,” Treasury spokeswoman Jennifer Zuccarelli was quoted as saying by the paper. “We are weighing ideas and have made no decisions.”
The government’s $700 billion rescue plan, known as the Troubled Asset Relief Program (TARP), has earmarked about $250 billion to recapitalize the troubled banking sector and spur lending.
Treasury’s planning could be complicated by Tuesday’s U.S. presidential election, the paper said.
Although both John McCain and Barack Obama voted for the plan, a new administration is certain to have its own ideas about how best to use the remaining $450 billion, the paper said.
The Treasury could not be immediately reached for comment by Reuters. (Reporting by Ajay Kamalakaran in Bangalore; Editing by Kim Coghill)