President George W Bush said the administration's latest rescue plan to revive the credit markets and restore market liquidity will ease pressure on the balance sheets of banks and other financial institutions.
“America's economy is facing unprecedented challenges, and we are responding with unprecedented action,” Bush said in a statement at the White House. Bush, calling the current crisis a “pivotal moment” for the nation’s economy, said more action was needed and urged bipartisan cooperation on efforts to stabilise financial markets.
“There will be ample opportunity to debate the origins of this problem; now is the time to solve it,” Bush said. “In our nation’s history there have been moments that require us to come together across party lines to address major challenges. This is such a moment.”
The president spoke after US Treasury Secretary Henry Paulson held a press conference to describe a plan that would remove troubled, mortgage-linked assets from the balance sheets of American financial companies. Those bad assets would be placed in a new institution so credit markets can function again.
The plan would require congressional approval. Members of Congress were awaiting details.
Stocks surged on Wall Street in early trading, after gains of more than 9 per cent in some European markets.
‘A Decisive Step’: “This is a decisive step that will address underlying problems in our financial system,” Bush said. The measure will allow banks to resume lending “and get our financial system moving again.”
The US government intervened to halt a credit crunch that triggered the greatest market turmoil since the Great Depression.
