Barack Obama became the 44th president of the U.S. on Jan. 20, 2009. In doing so, Obama became banker-in-chief in the credit market freeze that began in 2007. It was anticipated that Obama would lay out an economic stabilization plan within weeks of assuming the role of president.
Obama inherited what may be viewed by history as the worst recession in the U.S. since World War II unless he is able to get banks to lend money again.
Since the Bush administration and Congress in 2008 approved the $700 billion Troubled Asset Relief Program that injected capital into Bank of America Corp., Citigroup Inc. and JPMorgan Chase & Co., individuals and companies weren't getting any of it as fourth-quarter lending by the biggest banks by assets plummeted. The asset-backed market, which is supposed to enable banks to keep lending by transforming loans into tradable securities, remained frozen, leaving would-be lenders unable to package and sell mortgages, credit-card debt and auto loans.
After reporting more than $1 trillion of market losses and writedowns, banks were adding billions of dollars to reserves amid a 16-year high in unemployment and two years of falling home prices. Investor confidence waned, sending an index of bank stocks to a 13-year low last week. Obama, 47 at the time he took office, couldn't expect relief from the Federal Reserve, which already cut its main interest rate to as low as zero.
It was anticipated that Obama’s choice for Treasury secretary, Timothy Geithner, would be under pressure to address questions about the state of the economy and the new administration’s plans to shore up banks sagging under the burden of bad investment decisions.
On Dec. 17, 2008, Obama announced that Mary L. Schapiro would become the chairman of the Securities and Exchange Commission (SEC) under his new administration.Although her appointment is not a cabinet-level position, she faced confirmation by the Senate, some of whose members were critical of how the SEC performed in overseeing faltering investment banks.
Obama was born in Hawaii on Aug. 4, 1961. Obama grew up with his mother in Hawaii, and for a few years in Indonesia. Later, he moved to New York, where he graduated from Columbia University in 1983. He also earned a law degree from Harvard Law School.
- ↑ Wall Street Cuts Gains On Geithner Confirmation Worries. Reuters.
- ↑ Obama Becomes Banker-in-Chief in Credit Market Freeze. Bloomberg.
- ↑ The First Draft: The First Day. Reuters.
- ↑ US Financial Watchdog Boss Named. BBC.
- ↑ Picks Made for S.E.C. and Transportation Post. The New York Times.