Current Economic Issue Article Review - Essay Example

The issue was raised at the end of March 2009 by Jamie Dimon, the head of JPMorgan Chase, two heads of other large banks and the president of the Independent Community Bankers. They applied to the president Barack Obama and the Treasury secretary, Timothy F. Geithner, stating that “this is a source of considerable consternation” and declaring about the complaints small and large banks have about the high premium (Labaton and Andrews, 2009). Moreover, banking industry is anxious about the stress test, which could be held by the president administrations in order to impose changes on the banks’ management that may imply appointment of new officials.

Officials in their turn understand that it is necessary to take new steps, are ready to create new plans. Barack Obama stated: “You will be seeing additional actions by the administration” (Labaton and Andrews, 2009).  The problem is that the strain between the banks and the government is increasing because the government already does not have enough finances and can’t do without premium that is not paid by the bank. There is a necessary to ask Congress for more money, however Congress requires the presentation of the first program results.

Treasury Officials report that the fund is dwindling and they do not have enough finances to help more banks and other industries. Senator Charles E. Schumer states: “Between now and Memorial Day we’re going to know a whole lot more about the degree of trouble the banks are in… At the same time, we will begin to have a good initial reading as to how well the administration’s programs are working” (Labaton and Andrews, 2009). The top priority for the government is how to make the weak institutions reduce their failing mortgages.

The investigation shows that American banks have approximately $1 trillion of deteriorating mortgages, however, they did not document all the losses they have. Moreover, it was determined that banks set