£143bn injected into US financial system
The US government has announced a £143bn plan to rescue a variety of banks in an effort to restore confidence to the global financial system.
President Bush said the move would help to return stability to the US banking sector and ultimately help preserve free markets.
US federal authorities will also temporarily insure most new debt issued by US banks.
The moves echo similar steps taken by the UK and other European countries.
"This is an essential short-term measure to ensure the viability of America's banking system”. This is not intended to take over the free market, but to preserve it."
Bush said that the Federal Reserve would finalise work on a new programme that would make it the buyer of last resort for companies' short-term debt, known as commercial paper.
Furthermore, government deposit insurance is being expanded to cover accounts used by small businesses. Treasury Secretary Henry Paulson said that the lack of confidence in the financial system was a threat to the US economy.
The US move comes a day after the UK said it would inject up to £37bn of taxpayers cash into British banks Royal Bank of Scotland, Lloyds TSB and HBOS.
And European governments that share the euro are putting aside more than 1 trillion euros to protect banks through guarantees and other emergency measures.
The bulk of the money will be used to guarantee lending between banks.
The cash will also be used to take stakes in ailing banks.
