Special Report: Global Financial Crisis

    BEIJING, Jan. 14 -- Barack Obama will order the Treasury Department to limit executive compensation and dividend payments by financial institutions that get "exceptional assistance" from the financial rescue fund, Larry Summers, a top economic advisor to the president-elect, told Congress.

    Summers sent a letter to congressional leaders yesterday outlining the conditions that Obama supports in tapping the second half of the 700-billion-U.S.-dollars Troubled Asset Relief Program.

    "Those receiving exceptional assistance will be subject to tough but sensible conditions that limit executive compensation until taxpayer money is paid back, ban dividend payments beyond de minimis amounts, and put limits on stock buybacks and the acquisition of already financially strong companies," he wrote.

    Obama said he wants more of the money funneled to community banks and small businesses, as well as steps to loosen credit for individuals and help for homeowners facing foreclosure, said Summers, who was selected by the President-elect to head the White House National Economic Council.

    He also wants greater oversight of the aid program and a public accounting of how the money is spent.

    Obama, who takes office on Jan. 20, called President George W. Bush on Monday to request that he formally ask Congress to release the remaining TARP funds.

    The president-elect said he wanted the money available soon after he is sworn in as "ammunition" in event of an economic emergency. Bush then sent the formal notification to Congress on Monday night.

    Bush request

    The request, contained in an 18-page report, triggers a 15-day period when Congress can vote to deny the release, and it comes as Obama's aides draft plans for broadening the program beyond the Bush administration's focus on buying stakes in banks and imposition of restrictions and accountability standards.

    The changes, being coordinated with the Democratic majority in Congress, will include initiatives to stem mortgage foreclosures and direct more money to community banks and small businesses.

    "President-elect Obama believes there has been too little transparency and accountability; too much upside for financial institutions and executives who acted irresponsibly without providing enough help for small-business owners, families who are struggling to keep their jobs and make ends meet, and innocent homeowners," Summers wrote in his letter.

    (Source: China Daily)