Paulson Says New Focus on Asset-Backed Securities Market

In a statement earlier today, Treasury Secretary Henry Paulson said that new efforts are going to be made to address the currently difficult funding issues facing the non-bank consumer finance sector (defined as car loans, student loans, and credit cards primarily).

According to Paulson, "the illiquidity in this sector is raising the cost and reducing the availability of car loans, student loans and credit cards. This is creating a heavy burden on the American people and reducing the number of jobs in our economy. With the Federal Reserve we are exploring the development of a potential liquidity facility for highly-rated AAA asset-backed securities. We are looking at ways to possibly use the TARP to encourage private investors to come back to this troubled market, by providing them access to federal financing while protecting the taxpayers' investment."