October 28, 2008 / 8:39 AM / 9 years ago

Rescue plan faces delays in hiring asset managers: report

(Reuters) - The Treasury Department’s plan to begin buying bad loans and other troubled assets has been complicated by delays in hiring financial firms to oversee the $700 billion program, the Wall Street Journal said.

The U.S. government enacted the landmark financial bailout on Oct 3.

Several hurdles have arisen, including concern over the fees the government will pay asset managers, as well as a lack of manpower at Treasury, the paper said, citing people familiar with the matter.

The delays have contributed to investor uncertainty about how effective the rescue plan will be, the paper said.

Treasury is expected to hire managers soon, possibly as early as this week, according to the paper.

In recent days, bond giant Allianz SE’s Pacific Investment Management, or Pimco, has received indications it will likely be accepted to manage assets for the Treasury, the Journal said, citing a person familiar with the matter.

Treasury wants to ensure that each manager it hires is fully vetted, and that all potential conflicts of interest are examined and resolved, the paper cited people familiar with the situation as saying.

The program is subject to strict oversight, and Treasury expects the Government Accountability Office, as well as Congress and the public, to closely scrutinize each agreement, the paper said.

The Treasury could not be immediately reached for comment by Reuters.

Reporting by Ajay Kamalakaran in Bangalore; Editing by Kim Coghill

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