Washington – (OTL) United States President George W. Bush confirmed Tuesday government plans to drive $250 billion in the American banking sector, this comes after similar action announced by a number of European governments just day before.
The objective is to restore the financial sector and re-establish the economy back on the road to growth, Bush said in a brief televised statement in Washington.
America’s plan, where it will invest in nine US banks in trade for preferred shares, echoes a package unveiled by Gordon Brown yesterday, which also detailed proposals to buy stakes in leading lenders as well as curbing “fat cat” pay deals.
The White House plan is the first such deep government intervention in markets since the Great Depression. Bush said that he didn’t take the hard line and abnormal steps lightly, stressing that “these measures are not intended to take over the free market, but to preserve it.”
The nine banks are as follows: Citigroup, Goldman Sachs Wells Fargo, JPMorgan Chase, Bank of America, Merrill Lynch, Morgan Stanley, State Street and Bank of New York Mellon Corp.
As a result of the this news, stock markets around the world rallied with enormous gains Monday, with the rises continuing Tuesday.