MW: U.S. details massive bank recapitalization plan
By Rex Nutting, MarketWatch
WASHINGTON (MarketWatch) -- President Bush announced Tuesday the government's latest measures aimed at bringing stability to the financial system and encouraging the nation's banks to begin lending again.
The government mounted a full-scale push to explain the measures and their importance to helping the economy recover. Treasury Secretary Henry Paulson and Federal Reserve chief Ben Bernanke were scheduled to announce further details of the plan that has been leaking out over the past several days.
The heart of the plan is the determination that the government should spend $250 billion to buy ownership stakes in major U.S. banks in an effort to recapitalize the financial sector.
"These efforts are designed to directly benefit the American people by stabilizing our overall financial system and helping our economy recover," Bush said after meeting with Paulson, Bernanke and other top advisers.
The Federal Deposit Insurance Corp. will also insure all new bank debts in an effort to restart interbank lending. The FDIC will also insure all non-interest-bearing deposits.