While officials have been discussing leveraging money fromthe U

The sources said advisers to President-elect Barack Obama,who takes office on Tuesday under the shadow of the worst U.S.financial crisis in decades, were also considering the idea ofan aggregator bank among other options. In addition to steps to bolster banks, Obama officials wantto attack aggressively the underlying causes of the creditcrisis: the sharp downturn in the U.S. housing market and therelated deterioration in mortgage-related assets. One of the sources said options being considered by Obama'steam included the creation of a single national "bad bank,"individual institutions to specialize in different assetclasses, "bad banks" within existing large private banks, orsome combination of the three.

BACK TO THE FUTURE Bair and Paulson said the government could use money from aroughly half-used $700 billion U.S. That was the original aim of the bailout fund known as theTroubled Asset Relief Program, or TARP, which was revamped tofocus instead on providing capital to struggling banks. The idea of relieving banks of their bad assets, alongsideinjecting more public money into them, won support from one ofthe world's top fund managers on Saturday. "In time, this would help reliquify an economy that hasbeen brought to its knees by the credit crunch," MohamedEl-Erian, chief executive of Pacific Investment ManagementCompany, told Reuters.

"While far from inexpensive, it would be far cheaper thanthe alternatives, including offsetting the short- andlonger-term effects on the economy of a further implosion ofthe banking system," he said A surge in U.S. Goldman Sachshas estimated that losses worldwide could mount to $2 trillion,about double what has been realized so far. While officials have been discussing leveraging money fromthe U.S. bailout fund, it is not clear whether the fund islarge enough for the task at hand. Seeking more money, on top of a planned $825 billioneconomic stimulus push, may rattle investors further about thestate of U.S public finances. "They may very well have to come back to ask for TARP Two,"said Moody's Economy chief economist Mark Zandi.