WASHINGTON: The US government said yesterday it would plow $125 billion into nine top banks under its huge bailout plan.
In a bid to ease a credit crunch threatening wider damage to the economy, nine US institutions will get half of the $250 billion the government wants to invest in banks as part of a massive rescue of the financial system. “We executed the agreements for the nine institutions late last night so the money will go out the door for these institutions early this week,” Assistant Treasury Secretary David Nason told CNBC television.
The capital injections are from a $700-billion US government rescue plan that initially sought to address the problem of liquidity for banks by offering to buy up their toxic assets.
The nine banks are Citigroup, J.P. Morgan Chase, Bank of America, Goldman Sachs, Morgan Stanley, Wells Fargo, Bank of New York Mellon, State Street and Merrill Lynch, which is soon to be taken over by Bank of America. It came as economic worries dominated the campaign ahead of the November 4 US presidential election.
Despite global efforts to revive spirits, growing recession fears sent share and oil prices plummeting yesterday, with markets shrugging off new moves to protect shell-shocked economies.
A new survey showed business confidence in Germany, Europe’s number one economy, at its lowest point for more than five years and the IMF unveiled rescue plans for Ukraine and Hungary.
South Korea slashed its key interest rate, Japan announced fresh action to boost its ailing stock market and Australia’s central bank intervened to prop up its currency.