Panel: Credit Logjam Starts to Ease

NEW YORK CITY-Some signs of life are beginning to assert themselves in the capital markets, which have been in a state of near-hibernation since at least the Wall Street meltdown of last September. However, it will take decisive–and effective–action by the Treasury Department to break the logjam. That was one of the key points driven home by panelists at Wednesday’s Dealmakers Forum presented by the New York Post and hosted by the Real Estate Board of New York.

“Our banks are taking the TARP funds and surviving” rather than using the federal relief to make loans, said Bruce Mosler, president and CEO of Cushman & Wakefield. He called on Treasury secretary Timothy Geithner to make decisions on mark to market and removing toxic assets from banks’ balance sheets.

Douglas Durst, CEO of the Durst Organization, proposed a different course of federal action than the approach that’s been favored–if not actually pursued–in Washington. Rather than buying bad assets from banks, Durst suggested, Treasury should buy “top-tier” ones and require banks to recycle the proceeds into loans. It’s a renewal of lending activity that Durst would like to be able to take advantage of: asked by moderator Lois Weiss what it would take for his company to start acquiring properties again, Durst responded, “Financing. We’re not going to buy with 100% equity.”