Tuesday, October 14, 2008; 11:14 AM
With the government poised to invest
But given the depth of the crisis and the risk it would spark a broader economic downturn,
"The government's role will be limited and temporary,"
The government investment will "help healthy banks continue making loans, and this new capital will help struggling banks fill the hole created by losses in the financial crisis,"
"We regret having to take these actions,"
The nine banks that have agreed to government investment are:
News that European governments also planned to take stakes in their banks and anticipation of the
The rally continued today on Asian and European exchanges. In addition, some key measures of the crisis -- such as the interest rates banks charge each other for short-term loans -- began to ease.
The government's initiative, officially announced this morning before the markets opened for
In pressing the
Federal officials set conditions, telling the banks they could not raise their dividends without government permission and could not offer their executives new retirement packages, though the old packages would remain intact.
There is a risk that banks will take the new government capital and use it to bolster their balance sheets but still not resume lending, and the
Taken together, the steps planned by the
Over the weekend, global leaders agreed in meetings in
As part of the effort to flood the financial system with cash, the
Under the rescue legislation signed into law this month, the
During debates on Capitol Hill,
"When I was talking to members of
Among the first to push the idea of injecting money into banks in exchange for an equity stake was
At the meeting,
He said he thought that
"I do think there were some ideological predisposition against capital injections,"
Yesterday, few lawmakers took issue with the plan to recapitalize banks. But key Democrats argued that strict executive compensation limits should apply to any institution that accepts government money.
"Restrictions on executive compensation will ensure that taxpayer money is not wasted enriching the same people whose poor decision-making created this crisis,"
The extended guarantee matches similar guarantees by European countries, easing a concern that businesses would move money to overseas accounts. But the move also raises questions again about whether the
Earlier yesterday, while speaking to international bankers,
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The Nazis, Fascists and Communists were political parties before they became enemies of liberty and mass murderers.