The state of the economy is at the forefront of the nation’s mind and most, if not all, of us are following the multitude of news reports and press conferences that are occurring. Here’s the latest as of Tuesday morning.
President Bush announced early Tuesday morning the government’s $250 billion plan to purchase shares in nine of the nation’s major banks. The initial nine banks, with a few needing a bit of persuasion, have “agreed to accept government stakes for the good of the economy”. Additional banks wanting to apply for government purchases must do so by the November 14 deadline. Eventually the banks will buy back the stock.
Source: msnbc.com
“These efforts are designed to directly benefit the American people by stabilizing the financial system and helping the economy recover,” President Bush said in his statement.
Treasury Secretary Henry Paulson, Federal Reserve Chairman Ben Bernanke and FDIC head Sheila Blair also spoke Tuesday morning. They announced the implementation of the three steps below:
“First, Treasury is announcing a voluntary capital purchase program. A broad array of financial institutions is eligible to participate in this program by selling preferred shares to the U.S. government on attractive terms that protect the taxpayer. ”
“Second, after receiving a recommendation from the boards of the FDIC and the Federal Reserve, and consulting with the President, Secretary Paulson signed the systemic risk exception to the FDIC Act, enabling the FDIC to temporarily guarantee the senior debt of all FDIC-insured institutions and their holding companies, as well as deposits in non-interest bearing deposit transaction accounts. Regulators will implement an enhanced supervisory framework to assure appropriate use of this new guarantee. ”
“Third, to further increase access to funding for businesses in all sectors of our economy, the Federal Reserve has announced further details of its Commercial Paper Funding Facility (CPFF) program, which provides a broad backstop for the commercial paper market. Beginning October 27, the CPFF will fund purchases of commercial paper of 3 month maturity from high-quality issuers. ”
The full statement can be found at http://www.treas.gov/press/releases/hp1206.htm. Paulson said Tuesday, “Today’s actions are not what we ever wanted to do - but today’s actions are what we must do to restore confidence to our financial system.”
Tell Others What You're Reading!
Connect with me!
{ 2 trackbacks }
{ 0 comments… add one now }