The US Treasury Department, signalling a new phase in its $700bn financial rescue plan, is considering requiring companies seeking future government money to raise private capital in order to qualify for public assistance, reports the WSJ. The move is not expected to apply to the existing $250bn capital-purchase programme, which is already injecting money into banks. Treasury is considering attaching such conditions to any of its future capital investments, said people familiar with the matter. At the same time, Treasury is unlikely to conduct any auctions to purchase bad loans and other troubled assets, the original intention of the $700bn rescue plan. Instead, Treasury is expected to continue focusing its firepower on injecting capital directly into the financial sector. Treasury Secretary Hank Paulson may outline some of these changes Wednesday, when he provides an update on Treasury’s Troubled Asset Relief Program.
