Minggu, 05 Oktober 2008

Bailout Plan

Bailout plan

The US treasury will borrow $700bn from the international money markets by selling bonds to foreign countries.

The treasury will then use the money to buy back mortgage backed-securities from US banks and institutions.

It can use only $250bn immediately, although it does have access to another $100bn if required.

Access the final $350bn is subject to congressional approval.

The treasury can also use that money to save those banks on the verge of collapsing – although it would be entitled to a majority stake in the bank.

If the government takes on a debt and it's still making a loss after five years – the bank will have to pay compensation.

There plan also includes tighter controls over large payments to bank executives.

source: Aljazeera.net/English

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