For instance, one of the big issues in this whole financial mess is what the fair value of these sub-prime mortgages actually is - that’s one of the factors driving the credit crunch.
I assume that means that the Secretary and his cohort are going to have to come up with some way to value them, to determine how much money to allocate to the different companies. Since there’s no fair market value, that means a fair bit of economic assumptions and guestimates.
As well, a key aspect of a financial crisis is that the markets are looking for stability. That means the bailout only works if it happens quickly and surely, to restore / maintain investor confidence.
But if the Treasury Secretary’s methodology for assessing the value of the mortgages, which is essentially an economic question, not a legal one, is open to challenge in the courts by any of the affected companies, or by any of the creditors of the affected companies, or by any of the shareholders of the companies or their creditors, both the certainty and the quick solution disappear, as the courts could take several years to review the economic analysis and valuation methodology used by the Secretary. That would defeat the purpose of the bailout, since the markets would react in the short-term as if there hadn’t been any bailout.
Hence, a privative clause to give the Secretary considerable discretion, and to ensure that whatever decisions he makes can be implemented right away: time is of the essence.