Mike Peacock and Elaine Lies
Tuesday, Oct 14, 2008
The United States will announce plans on Tuesday to inject $250 billion into its banks, following similar, concerted measures in Europe to revive money markets and stave off global recession.
The Treasury is due to unveil its plan at 8:30 a.m. EDT with about half of the total figure likely to go to the top nine U.S. banks to get them lending to each other again, people familiar with the plan said.
Federal Reserve Chairman Ben Bernanke said in an article on the Wall Street Journal’s website that the measures, which he did not detail, constituted a broad-based attempt to end the crisis which began with collapse of the U.S. housing market and now threatens industry and jobs worldwide.
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“These steps will allow us to restore more normal market functioning and encourage private capital to further support the reinvigoration of financial markets,” he wrote.
The Treasury will buy stakes in Bank of America Corp, Wells Fargo, Citigroup, JPMorgan Chase & Co, Goldman Sachs, Morgan Stanley and Bank of New York Mellon Corp, said two sources speaking on condition of anonymity.
Media reports said State Street Corp and Merrill Lynch would also receive a capital injection.