HEADLINE: Banks get money, White House says lend it
CAPTION: Billions of dollars in bailout money is flowing from the federal government to U.S. banks. An impatient White House is prodding financial institutions to not hoard that money and instead start making loans. (Oct. 28)
The federal government Tuesday began pumping billions of dollars into U-S Banks.
Treasury Department under-secretary Tony Ryan comes after a weekend of deal making.
(Tony Ryan, Treasury Department)
‘We’ve signed final agreements with the initial nine major financial institutions that hold fifty percent of all U-S deposits…and over this past weekend we directed our custodian to deliver the capital to these institutions and that process is starting today.”
In all, 125 billion dollars will invested in U-S banks over the coming days.
Institutions such as Citigroup and Wells Fargo are each getting 25 billion dollars.
Other firms, like Goldman Sachs and Merrill Lynch will each get 10 billion dollars.
(Ted Shaffrey, The Associated Press)
“The idea is to get credit flowing again, with hopes of stabilizing the economy and fighting off a protracted recession.”
This money comes from the 700 billion dollar economic bailout package passed by Congress and signed by President Bush earlier this month.
“This program is aimed at healthy banks, and offers attractive terms to encourage lending.”
Another injection of capital to a second round of banks is also in the works, according to the Treasury.
More than 35 billion dollars will be divided up among regional banks like P-N-C, Capital One and Northern Trust.
As the nation’s biggest banks become partly nationalized, the government is hoping the banks will have no hesitation in lending that money back into the economy – an essential step for the plan to work.
Standard and Poor’s analyst Sam Stovall says that XXXXX
(Sam Stovall, Standard & Poor’s)
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Over the next several weeks, the Treasury is expected to use billions more of the bailout money to start buying up bad subprime mortgage loans, in a bid to usher the return of a stable economy.
Ted Shaffrey, The Associated Press, New York
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