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Essay text:
Treasury to buy troubled
mortgages and mortgage-related securities. However, the original package (US$ 700
billion) has been revised to include a recapitalization of banks, federal guarantees on
new bank debt for three years and FDIC insurance for non-interest bearing accounts. If
the troubled assets (MBS) bought by the Treasury are later sold at a fair market value,
this could ultimately be a profitable transaction for the U.S. government. And, if the
Treasury finds the right buyers for the banks that it partially owns, then it could also end
up making money.
• In Europe, the Bank of England pledged US$ 87 billion in direct support to the
country’s major financial institutions...
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