Paulson says U.S. planning to buy bank stocks

South Africa News.Net
Friday 10th October, 2008

U.S. Treasury Secretary Henry Paulson said Friday the government was working on a plan to buy stock in financial institutions.

The plan is to use part of the funds in a $700 billion rescue package signed in to law last Friday after its passing by Congress.

'We are working to develop a standardized program that is open to a broad array of financial institutions,' Paulson said Friday

'Such a program would be designed to encourage the raising of new private capital to complement public capital,' he said.

Any shares purchased by the U.S. government would be non-voting shares except, he said, 'with the respect to the market standard terms to protect our rights as investors.'

Paulson said that developing a standard program is the best way to 'use taxpayer money more efficiently and have it go farther.'

He didn't specify what the government's terms would be for companies that take part in the capital injection program.

'We're working as quickly as possible to unveil the capital plan,' the treasury secretary said. 'We want to do it as soon as possible, but we want it to be right, and we want it to be effective. We're working around the clock.'

Paulson was upbeat about global co-operation in dealing with the financial crisis, following the G-7 meeting in Washington. 'The G-7 is compelled to robust international partnership and cooperation,' he said after the meeting. 'Never has it been more essential to find collective solutions to ensure stable and efficient financial markets and restore the health of the world economy.'

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