Some Experts Say Rescue Program Might Not Work

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By Binyamin Appelbaum Washington Post Staff Writer Tuesday, March 24, 2009; Page A06

Investors may have cheered the administration's latest financial bailout plan yesterday, but a chorus of academics and financial experts expressed skepticism, saying there are better ways to restore the health of the banking system.

Some warned that the new plan will likely fail, or fall short, because banks will demand higher prices than investors are willing to pay.

There was also widespread agreement that the Obama administration, like its predecessor, has not done enough to explain its choice of a fraught and controversial approach.

"I think we suffer from the lack of a fuller explanation. I think they would inspire much more confidence if they explained their rationale," said Hal Scott, a Harvard Law School professor who specializes in financial systems.

More: http://www.washingtonpost.com/wp-dyn/content/article/2009/03/23/AR2009032302808.html