Washington, DC (GroundReport) – According to reports, President Bush on Tuesday announced a $250 billion plan by the government to directly buy shares in the nation’s leading banks. The President added that drastic steps were "not intended to take over the free market but to preserve it," reports The Associated Press.
Nine major banks are slated to take part initally including all of the country’s largest institutions.
Reports suggest that some of the big banks had to be pressured to participate in the program by Treasury Secretary Henry Paulson. Why? Because Paulson wanted healthy institutions that did not need capital from the government to go first. This would remove any stigma that might be associated with banks getting bailouts, said Paulson.
"These efforts are designed to directly benefit the American people by stabilizing the financial system and helping the economy recover," Paulson was quoted as saying by AP.
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