US President announces 250 billion dollar bank sector infusion
US President George W Bush announced Tuesday plans for the government to pump 250 billion dollars in the American banking sector, following similar action announced by several European governments the day before, reported dpa.
The goal is to revive the financial sector and to return the economy back on the road to growth, Bush said in a brief televised statement in Washington.
The purchase of shares and stakes in banking institutes would be "short-term measure" towards stabilizing the markets, Bush said. The banks can then later repurchase their stakes from the state.
But Bush cautioned that it would take some time until all the state measures towards stabilizing the financial sector and economy would have their full effect.
According to US media reports, the government buy-in would include nine of the largest financial concerns including Citigroup, Bank of America and JP Morgan Chase. The broadcaster CNBC said that the state might potentially buy in to thousands of banks.
Bush's announcement follows the concerted actions announced by several European governments on Monday for massive financial infusions to shore up the financial sector. In the aftermath, stock markets around the world rallied with huge gains on Monday, with the rises continuing on Tuesday.