Monday, September 15, 2008

Treasury Secretary Paulson vows to maintain stability of US financial markets

US Treasury Secretary Henry Paulson vowed Monday to take steps to maintain stability in US financial markets, as the failure of US banking titans sent global markets into a slump.

"I am committed to working with regulators and policymakers - including Congress - to take necessary and appropriate steps to maintain the stability and orderliness of our financial markets," Paulson said in a statement.

Lehman Brothers, one of the highest profile investment institutions, declared itself bankrupt Monday after last-ditch efforts to find a buyer collapsed.

In the fallout, Bank of America took over Merrill Lynch in a 50 billion dollar deal, insurance giant AIG was reported to have sought a massive emergency loan to head off its own crisis and a group of banks set up a 70-billion-dollar global emergency fund.

The US Federal Reserve, European Central Bank and Bank of England injected tens of billions of dollars into money markets after the fall of the banking titans under the weight of the massive financing of bad loans.

Paulson, who took part in weekend discussions in New York, said the actions "will be critical to facilitating liquid, smooth functioning markets, and addressing potential concerns in the credit markets."

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