October 6, 2008



ANALYZING THE EMERGENCY ECONOMIC STABILIZATION ACT OF 2008

The Emergency Economic Stabilization Act of 2008 (EESA) is one of history’s most aggressive interventions in the workings of the financial system.

By establishing a program authorizing, over time, the possible purchase of up to $700 billion in troubled assets held by banks, broker/dealers, mutual funds, insurance companies and other financial institutions that have significant operations in the US, this new federal program is an attempt to restore confidence and liquidity to the troubled operation of the banking sector and payments system. The impact that the provisions of this new law will have on financial market participants will be extraordinary.

EESA’s stated purposes reflect the enormous challenges affecting our financial markets. They are multi-faceted and, at times, potentially contradictory. These purposes include:

  • Restoring liquidity and stability to the US financial system;
  • Minimizing foreclosures, protecting investors, lowering costs and maximizing returns to US taxpayers;
  • Reviewing and addressing the deficiencies in the current financial regulatory system that led to the credit crisis at hand; and
  • Modernizing the US financial regulatory system to: protect consumers and homeowners; reform mortgage lending and the securitization process; enhance transparency and fairness in financial markets; and ensure the future stability of the financial system.

For our readers, we have prepared an overview of EESA, as well as a closer look at its relevant details, including a chart summarizing its provisions.

Please read the overview here, and the detailed chart here.

Please read our earlier updates about the financial crisis and other
DLA Piper commentary here.