Yesterday, Treasury released entitled “The Next Phase of Government Financial Stabilization and Rehabilitation Policies.” The report states that utilization of the policies put in place to address the financial crisis continues to decline. However, Treasury remains “committed to ensuring the stability of financial markets and rehabilitating channels of credit creation that are critical to American families and businesses.”

In outlining the road ahead, the report lists four elements of the next phase designed to move from rescue of the financial system to a period of stabilization, rehabilitation, and rebuilding. The first element, according to the report, will be the exit from some emergency programs such as Treasury's Money Market Mutual Fund Guaranty Program and the FDIC's Temporary Liquidity Guarantee Program as the financial markets continue to improve. Second, Treasury expects reliance on federal support programs to continue to decline. Third, Treasury predicts that institutions will continue to trend away from receiving capital infusions to repaying capital, noting that they expect banks to repay another $50 billion over the next 12 to 18 months. Finally, the report reaffirms the Obama administration’s support for comprehensive regulatory reform. To underscore this point, Secretary Geithner stated that comprehensive reform was essential to make “sure that the same vulnerabilities in our system which gave rise to this recession are not allowed to trigger another.”