NERA Releases White Paper on US Financial Bailout Reverse Auction Plan

28 September 2008

New York/28 September 2008 -- A new paper on reverse auctions, the cornerstone of the financial bailout plan currently being promoted by Treasury Secretary Henry Paulson and hotly debated on Capitol Hill, was published today by NERA Economic Consulting.

Buying the Bad Stuff: Implementation Considerations for the Paulson Plan offers a comprehensive overview of reverse auctions. The paper examines the complexity of valuing mortgage-backed securities, and the various options for designing the auctions under which the government will buy the bad debt.

"The way the auctions are designed will be critical in determining the incentives of bidders to compete, the degree of price discovery, and ultimately the success of the program," said NERA Senior Vice President Dr. Chantale LaCasse, one of the paper's co-authors.

Dr. LaCasse is an expert in designing, implementing, and managing auctions, and has extensive experience doing so with energy products. She has also testified as an expert witness on auction design and rules related to auction implementation.

NERA Senior Vice Presidents Dr. Marcia Kramer Mayer and Dr. Elaine Buckberg and Senior Consultant Dr. Arun Sen, members of the firm's Securities and Finance Practice, are Dr. LaCasse's coauthors.

About NERA

NERA Economic Consulting ( is a global firm of experts dedicated to applying economic, finance, and quantitative principles to complex business and legal challenges. For over half a century, NERA's economists have been creating strategies, studies, reports, expert testimony, and policy recommendations for government authorities and the world's leading law firms and corporations. We bring academic rigor, objectivity, and real world industry experience to bear on issues arising from competition, regulation, public policy, strategy, finance, and litigation.

NERA's clients value our ability to apply and communicate state-of-the-art approaches clearly and convincingly, our commitment to deliver unbiased findings, and our reputation for quality and independence. Our clients rely on the integrity and skills of our unparalleled team of economists and other experts backed by the resources and reliability of one of the world's largest economic consultancies. With its main office in New York City, NERA serves clients from more than 25 offices across North America, Europe, and Asia Pacific.