Markets

Nov 25: Chris Flanagan talks about the Tarp bail-out plan

November 25 2008: Chris Flanagan, managing director at JP Morgan and head of the bank's asset-backed research, says the latest plan from the Treasury and the Federal Reserve to thaw frozen asset-backed markets - the $200bn Term Asset-backed Securities Loan Facility - is "not a straightforward or simple plan". Implementation details remain, including which securities are eligible, the term of the financing and the "haircut" - which will establish a level at which the investor can put the securities back to the Fed. The $500bn the Fed plans to spend to buy Fannie Mae and Freddie Mac debt is a powerful way to lower mortgage rates, which could improve the affordability of housing.