AMERICA:PRESIDENT BUSH yesterday tried to inject some confidence into Americans rattled by the financial crisis, saying the government had a "comprehensive strategy and the tools necessary" to solve it.
Speaking in the Rose Garden, Mr Bush said the $700 billion (€519 billion) rescue plan passed by Congress a week ago would help restore stability to the financial system. He said this could be done through government purchases of troubled assets, but also through direct injections of public money into financial institutions in return for an equity stake - a solution that has been gaining ground within the administration this week.
"They [treasury] will implement measures that have maximum impact as quickly as possible," said Mr Bush. "The plan we are executing is aggressive. It is the right plan," he said.
As Mr Bush was speaking, US stock markets were experiencing their latest sharp drop. "This has been a deeply unsettling period for the American people. Many of our citizens have serious concerns about their retirement accounts, their investments and their economic well-being."
In recent weeks, Mr Bush has on several occasions addressed Americans to discuss the crisis, but his interventions have had little visible impact in terms of calming markets. "Anxiety can feed anxiety, and that could make it hard to see all that is being done to solve the problem," he said.
Yesterday's appearance came at the end of a week that saw US authorities taking a series of dramatic steps to tackle the crisis. The Federal Reserve cut interest rates to 1.5 per cent in a move co-ordinated with other central banks; boosted the size of two liquidity facilities it has made available to commercial banks; and unveiled a plan to bolster the shrinking market for commercial paper - which banks and corporations use to fund their daily operations - by purchasing short-term debt through a special purpose vehicle.
Meanwhile, the treasury reopened several debt issues to make some $40 billion of additional treasury securities available amid increasing evidence of a shortage as investors flock to safer paper.
It was also setting up the infrastructure to manage the $700 billion rescue plan.
Mr Bush also highlighted the Federal Deposit Insurance Corporation's new authority to guarantee banking deposits of up to $250,000 - as opposed to the previous threshold of $100,000.
Mr Bush acknowledged the global nature of the financial crisis, as G7 finance ministers gathered in Washington for the annual meetings of the International Monetary Fund and the World Bank.
"The world is sending an unmistakable signal: we're in this together and we'll come through this together," he said.
(
Financial Timesservice)
