(October 14, 2008)--President Bush early Tuesday morning announced a $250 billion government plan to buy shares directly in the nation's leading banks.
He said the moves are "not intended to take over the free market but to preserve it."
Mr. Bush said the federal government will use part of the $700 billion from the bailout measure that Congress approved to inject money into banks "by purchasing equity shares."
He said the Federal Deposit Insurance Corporation will "temporarily guarantee" most new debt issued by insured banks.
The FDIC also will expand government insurance to cover all non-interest bearing accounts, aiding small businesses in covering their day-to-day operations, and the president said the Federal Reserve will "soon finalize work" on a new program to serve as a buyer of last resort for commercial paper.
Treasury Secretary Henry Paulson admits the administration's banking industry stabilization plan was not something "we ever wanted to do,” but in the current crisis, he said it's what the U.S. "must do to restore confidence in our financial system."
Paulson acknowledged that the idea of government owning part of private U.S. companies is objectionable to most Americans, himself included, but he says doing otherwise in the current crisis would be "totally unacceptable."
The Treasury chief emphasized that these financial institutions won't be hoarding the new capital, but using it to bolster lending to each other and to customers.
White House Web Site
Save
Email
Print
Terms of Use -
Privacy Policy -
EEO Statement
-
FCC Form 388