Can $700 Billion Unclog
The Credit Spigot?
By Danielle Douglas
and Maria Wood
AFTER WEEKS OF CONGRESSIONAL INFIGHTING AND
presidential pleading, the Emergency Economic Stabilization
Act of 2008 has been signed into law. Aimed at propping up the
crumbling financial system, the bill allows the Treasury
Department to purchase up to $700 billion in distressed mort-gage-related assets from financial institutions. Having watched
the credit markets all but dry up in the past year, many in the
commercial real estate business view the government action as
much needed relief.
“We’re in a market with no liquidity, so anything that helps
lubricate the system is a good thing for our industry,” says
Michael Szwajkowski, president of structured finance at
CapitalSource in New York City. “While the bailout isn’t neces-
