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President Bush on Tuesday announced that the federal government would use $250 billion of the financial rescue package to buy shares in some of the country's largest banks. Bush, speaking in the Rose Garden after a meeting with his financial working group, said the first part of the $700 billion financial rescue plan is “not intended to take over the free market, but to preserve it.” In addition to helping banks with direct cash infusions, Bush said the Federal Deposit Insurance Corporation (FDIC) will guarantee most new debt of banks, allowing them to borrow money and freeing up money to give loans to businesses and individuals. The FDIC will also insure almost all small-business accounts, up from the recently increased $250,000 insurance for individuals that Bush said "will give small business owners peace of mind." Bush hailed the actions taken by G-7 countries over the weekend and on Monday to get the markets moving. "These are wise and timely actions, and they have the full support of the United States," Bush said. The president added that the decision to inject money into financial institutions will "fill the hole created by losses during the financial crisis." "This is an essential short-term measure to ensure the viability of the country's banking system," he said. |
