Friday, January 22, 2010

In the Dow Jones Newswire, "Ex-Tarp Chief: Proposals Should Consider Broad Risk

JANUARY 22, 2010, 4:35 P.M. ET
UPDATE: Ex-TARP Chief: Proposals Should Consider Broad Risk

(Adds post-speech comments from Lambright in fourth paragraph.)
By Marshall Eckblad

NEW YORK (Dow Jones)--The former chief investment officer of the U.S. government's Troubled Asset Relief Program said Friday proposals for overhauling the U.S. financial system should focus on limiting broad risks at institutions large and small.
Risk "could arise from lots of small institutions," said Jim Lambright, who left the TARP program last summer, at a financial services conference hosted by the Australian Consulate in New York.
President Barack Obama said in a speech Thursday he is committed to limiting the investment activities and risk levels of the nation's banks, and he also signaled the biggest banks could be forced to shrink.
Lambright didn't address any specific proposals in his speech. He said after the speech that he was challenging the audience to ask "where risks might migrate to other parts of the system."
Lambright was an appointee in the Bush administration under then-Treasury Secretary Henry Paulson, but stayed on to work for the Obama administration.
David Shulman, a former executive at Lehman Brothers and now an economist at the UCLA Anderson Forecast, told Dow Jones Newswires on Thursday that any regulatory overhaul should include capital requirements for bigger hedge funds to prevent banks from being exposed to risk at less regulated firms.
-By Marshall Eckblad, Dow Jones Newswires; 212-416-2156;


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