"The decision whether to provide financial assistance to the institution or to put it into conservatorship/receivership will be made by the Secretary and the FDIC, and will be informed by the recommendations of the Federal Reserve Board and the appropriate federal regulatory agency" if different from the FDIC, the Treasury said.

Moreover, the proposed legislation would permit the US government to utilize a number of different forms of financial assistance in order to stabilize the institution in question.

It would create an appropriate mechanism to fund the appropriately limited exercise of the resolution authorities it confers.

This could take the form of a mandatory appropriation to the FDIC or through a scheme of assessments on the financial institutions.

The government would also receive repayment from the redemption of any loans made to the financial institution in question, and from the ultimate sale of any equity interest taken by the government in the institution.

At a prime-time news conference on Tuesday, the second he had held since taking office in January, President Barack Obama also urged Congress to grant his government the new authority.

He said such power could have lessened the problems at AIG and that he anticipates "strong support" from the public and Congress for the new authority.

"We should have obtained it much earlier so that any institution that poses a systemic risk that can bring down the financial system, we can handle and we can do it in an orderly fashion, that quarantines it from other institutions," Obama said at the news conference.

"We don't have that power right now, that's what (Treasury) Secretary (Timothy) Geithner is talking about and I think there's going to be strong support from the American people and Congress to provide that authority," he said.

(Xinhua News Agency March 26, 2009)