US official cites progress in easing bank crisis

Financial Crisis Posted on

The head of the government's $700 billion financial rescue program told Congress Thursday that the Bush administration has made "tremendous progress" in pushing to get it implemented.

Neel Kashkari, a Treasury Department official who is interim head of the program, told the Senate Banking Committee in prepared testimony that since last week's announcement that the government would spend $250 billion to buy bank stocks to bolster capital reserves, there has been "numerous signs of improvement in our markets and in the confidence in our financial institutions."

Separately, former Federal Reserve Chairman Alan Greenspan told another congressional panel that the current global financial crisis is a "once in a century credit tsunami" that policymakers did not anticipate.

Although some critics have blamed Greenspan for contributing to the current crisis by leaving interest rates too low for too long, he put the blame on soaring mortgage foreclosures on overeager investors who did not properly take into account the threats that would be posed once home prices stopped surging upward.

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