US unveils $1.55tn bank rescue scheme
Tuesday 10th February 2009, 5:47PM GMT.
The United States treasury has unveiled an upgraded $1.55 trillion (£1.06 billion) rescue plan for the country’s financial institutions.
Treasury secretary Tim Geithner said the revamped package, increased from $200 billion, would include $1 trillion in new lending, $500 billion worth of toxic assets being taken from banks and an additional $50 billion in federal rescue funds.
He told journalists the bailout was primarily aimed at restarting the flow of credit to businesses and consumers.
“Instead of catalysing recovery, the financial system is working against recovery. And at the same time, the recession is putting greater pressure on banks. This is a dangerous dynamic, and we need to arrest it,” he said.
“It is essential for every American to understand that the battle for economic recovery must be fought on two fronts. We have to both jumpstart job creation and private investment, and we must get credit flowing again to businesses and families.”
Mr Geithner added that the treasury intended to “stress-test” big banks and address the country’s housing crisis.
The US senate is due to vote on Barack Obama’s fiscal stimulus package later.
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