| Business | October 17, 2008 2:39 PM EST |
| Treasury Department outlines bailout plan |
| By Luisana Suegart from Markets.com |
The $700 billion authorized by Congress towards the bailout of the U.S. financial system is being allocated by the Treasury Department, a top official said.
Interim assistant secretary for financial stability Neel Kashkari spoke before the Institute of International Bankers in Washington D.C. on Monday, and outlines how government plans to use the funds towards stabilizing banks and restoring investor confidence.
“Treasury is implementing its new authorities with one simple goal – to restore capital flows to the consumers and businesses that form the core of our economy,” Kashkari said.
According to Kashkari, the Treasury Department is focusing on five approaches to allocating the funds, including the purchase of bad mortgages and mortgage-backed securities, insuring mortgages and mortgage-backed securities, buying equity in a variety of banks, and helping more people avoid foreclosure.
The bailout signed 10 days ago has not yet had a positive impact on the financial crisis; with global markets seeing record-breaking losses last week, the government announced more efforts to alleviate the situation. Last week, the U.S. Treasury revealed its plans to infuse U.S. banks with capital in exchange for investment stakes.
The same measure is being implemented by the U.K., where the British Treasury announced on Monday it would invest $63 billion into its troubled banks.
Treasury Secretary Henry Paulson was evaluating the effects of guaranteeing billions of dollars in bank debts and temporarily insuring all U.S. bank deposits, a move intended to unfreeze bank lending, The Wall Street Journal reported on Friday. Behind the plan, the federally insured deposit limit was raised from $100,000 to $250,000.
Recent Comments:
|
Advertisement |