Bail-out leads to conflict of interest claims

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more: http://www.telegraph.co.uk/news/worldnews/northamerica/usa/3135641/Bail-out-leads-to-conflict-of-interest-claims-as-Wall-Street-financiers-cash-in-on-crisis.html

Bail-out leads to conflict of interest claims as Wall Street financiers cash in on crisis
New questions have been raised about the $700 billion economic bail-out of the US economy as President George W. Bush warned that the world may have to wait weeks for the benefits of the rescue package to be felt.

By Tim Shipman
Last Updated: 12:09AM BST 05 Oct 2008

In a radio address to the nation, Mr Bush hailed the historic deal, the largest in US history, for providing "the necessary tools to address the underlying problem in our financial system" and "put our economy on the road to recovery".

But he warned: "While these efforts will be effective, they will also take time to implement. The benefits of this package will not all be felt immediately."

Doubts about the package were fuelled when financial experts warned that conflicts of interest could arise because Wall Street financiers, many of whom have been blamed for causing the financial meltdown in the first place, will have a hand in spending the $700 billion of taxpayers' money.

The bail out plan, finally passed by the US House of Representatives and signed into law by Mr Bush on Friday afternoon, will enable the Bush administration to buy up the bad debts of failing banks to kick start the flow of credit through the economy.

But the US Treasury does not have the staff to make the decisions about which banks and which debts to buy up and will instead spend the next few weeks hiring Wall Street experts to do the buying for them.