U.S. May Consider Setting Up Agency to Buy Bad Debt

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U.S. May Consider Setting Up Agency to Buy Bad Debt

House Financial Services Chairman Barney Frank (D-Mass) Says U.S. May Consider Setting Up Agency to Buy Bad Debt Bloomberg (09/16/08); Rowley, James

Some investors, including Bill Gross, co-chief investment officer of Newport Beach, California-based Pacific Investment Management Co., are calling for the government to play a bigger role in resolving the credit crunch. Worldwide, financial institutions have reported more than $500 billion in losses and writedowns stemming from the collapse of the subprime-mortgage market.

House Republican leader John Boehner today said creating an agency to buy distressed debt is “probably not the answer.” According to House Financial Services Committee Chairman Barney Frank, D-Mass., the nation’s ongoing financial woes are likely to force Congress and the White House to seriously consider whether the federal government should purchase distressed debt and mortgages.

The lawmaker says the next step may be to create an agency like the Resolution Trust Corp., which took over the assets of failed savings and loan associations nearly 20 years ago, to get financial markets “out of the box.” Frank insists that such an intervention would occur “only if it’s coupled with tough regulation in the future” and only if there is “a realization that the market not only got into this fix but can’t get itself out.” Around the globe, financial institutions have recorded more than $500 billion in losses and write downs resulting from the collapse of the subprime-mortgage market.


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Michael is Managing Partner & CEO of No World Borders, a leading health care management and IT consulting firm. He leads a team that provides Cybersecurity best practices for healthcare clients, ICD-10 Consulting, Meaningful Use of Electronic Health Records. He advises legal teams as an expert witness in HIPAA Privacy and Security, medical coding and billing and usual and customary cost of care, the Affordable Care Act and benefits enrollment, white collar crime, False Claims Act, Anti-Kickback, Stark Law, Insurance Fraud, payor-provider disputes, and consults to venture capital and private equity firms on mHealth, Cloud Computing in Healthcare, and Software as a Service. He advises self-insured employers on cost of care and regulations. Arrigo was recently retained by the U.S. Department of Justice (DOJ) regarding a significant false claims act investigation. He has provided opinions on over $1 billion in health care claims and due diligence on over $4 billion in healthcare mergers and acquisitions. Education: UC Irvine – Economics and Computer Science, University of Southern California – Business, Stanford Medical School – Biomedical Informatics, Harvard Law School – Bioethics.

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