RTC Idea Floated as Early as January

The idea of creating a Resolution Trust Corp.-like entity to invest in ailing mortgage-related assets has been floating around the Treasury Department since January. One adviser familiar with the plan said former Treasury Undersecretary Robert Steel (who recently became the head of Wachovia Corp.) was instrumental in developing the idea. National Mortgage News reported on the existence of the plan in a Web column in January. However, back then the Treasury Department was not openly acknowledging that it even had a plan, much less one shaped after the RTC. The adviser, requesting anonymity, said the Treasury was hoping it would never have to use it. The RTC was created by Congress in 1989 to manage and sell billions of dollars in real estate, loans, and other assets belonging to failed thrifts. Eventually the agency was merged into the Federal Deposit Insurance Corp. Like Treasury Secretary Henry Paulson, Mr. Steel is an alumnus of Goldman Sachs. Mr. Steel became under secretary for domestic finance in October 2006. He retired as vice chairman of Goldman in 2004. He started with the firm in 1976.