Monday, October 13, 2008

U.S. Treasury to Invest in `Healthy' Banks

U.S. Treasury official Neel Kashkari, who is overseeing the $700 billion rescue of the financial system, said government equity injections will be aimed at ``healthy'' firms.

U.S. officials are hurrying to address frozen credit markets that led France, Germany and Spain to agree yesterday to commit $1.3 trillion to guarantee interbank loans and take equity stakes in banks. Buying shares of financial institutions has become the latest focus of Treasury Secretary Henry Paulson's rescue plan.

Paulson and Federal Reserve officials today will meet with executives from financial companies to discuss the government plan to restore confidence in credit markets, the Treasury said.

Kashkari said the Treasury will ``attack'' bad debt clogging financial markets from ``multiple directions.'' ``We are working around the clock to make it happen,'' he told the Institute of International Bankers.

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