Bush: U.S. to buy bank shares

The federal government plans to use a portion of the $700B financial rescue plan to purchase equity shares in U.S. banks.

Today I am announcing new measures of American’s taking into implement the G7 action plan than strengthening the banks across our country. First, the federal government will use a portion of the 700-billion-dollar financial rescue plan to inject capital in the banks by purchasing equity shares. The new capital will help healthy banks continue making loans to businesses and consumers, and this new capital will help straggling banks fill the hole created by loss during the financial crisis, so they can resume landing and helps for job creation in economic growth. This is essential short term measure to ensure the viability of American’s banking system.

And the programme is carefully designed to encourage banks to buy their shares back from the government when the market stabilized and they can raise capital for private investors second effective and immediately. The FTIC will temporarily guarantee most new debts issued by insured banks, this will address one of the central problems plugging our financial system.

Banks have been unable to borrow money and that is restricted their abilities to lend to consumers and businesses. When money flows more freely between banks, you will make it easier for Americans to buy a * cars and homes and push more businesses to expand.

There the FTIC will immediately and temporarily expand government insurance to cover all none interest burry transaction accounts. These accounts are used primarily by small businesses to cover day to day operations. When assuring every dollar needs in accounts, we will give small business owners a piece of mind and bring stability to the * greater stability to the banking system.

Fourth of Federal Reserve will soon finalize work on the new programme to serve as a * resolve for commercial paper, the key source of short term financing for American businesses and financial institutions. And by unfreezing the market for commercial paper, the Federal Reserve will help American businesses meet payroll and purchasing material and invest to create jobs.