A $250bn rescue deal to purchase stakes in a wide number of banks is finally on the way. Hopefully this will restore confidence in the banking system efter the recent turmoil US goverment officials said.
Mr. Bush said that this is not an attempt to take over the free system but to perserve it. This is only seen as a short term effort to restore confidence and to keep the system from total collapse. The money will come from the £700bn plan that came through earlier this week.
Federal Reserve Chairman Mr. Ben Bernanke said that they will not stand down until the system has been repaired and reformed.
This plan has been long awaited by the market and will come as a welcoming plan to both the public and the banks. The announcement comes after European countries have already put in place a rescure package itself.
Although these billion will come from tax payers the goverment is hoping that in the end they will come out of this crisis with profit after resale of the banks stocks to the market.
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2 comments:
The bail out bill may have come through, but in your own opinion do you believe that this bailout plan or actually the amount of $700 billion will increase the confidence of the public? Firstly, I believe that the bailout bill is not enough more money will be needed to entirely increase the markets confidence. The public on the other hand I believe are not very keen on this bailout plan as
they have protested against this bailout, which I totally understand, but on the other hand on the 10th of September before the 9/11 more than $1 TRILLION were missing from the pentagon, which then again is contradiction of the public. Furthermore, I would like to know your opinion on this whole situation and if you believe it is correct to take money from each persons pocket although it was a big failure and mistake from the multi-billion dollar banks? Don you think they should clean the mess which they have left and not attack the public for it?
Pan Yi
I do not think that it is right to take the money from the tax payers pocket. I know that first hand by living most of my life in Sweden and seeing all our hard on money going to support unemployed and to keep on pumping money into problem areas and seeing the money dissapearing without an effect. However on the confidence side, I think that the market and public confidence change much to often and very soon you are going to see investors back in action as there is too much possibility to let by. The public will whatever the goverment does be effected negativly whether by seeing some of there tax money go into the financial system or by the slow down in the economy by loss of jobs and thereby loss of people spending money in the market.
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