14 October 2008 |
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| President Bush delivers remarks on the economy in the Rose Garden of the White House in Washington, Tuesday, 14 Oct. 2008 |
Speaking at the White House Tuesday, U.S. President George Bush said the plan will encourage banks to resume lending. Economists say the stalled credit market threatens to push the global economy into recession.
Besides buying a significant state in some banks, the new initiative guarantees loans between banks and insures more deposits.
The announcement follows crisis talks in the past few days with economic leaders from around the world. The U.S. plan follows similar moves by European governments, which have pledged about two trillion dollars to rescue their own banks.
The U.S. effort is funded by the $700 billion market rescue plan Congress approved earlier this month.
Major Asian and European markets rose strongly earlier Tuesday in anticipation of the new U.S. economic initiative.
Asian markets closed sharply higher for the second straight day. Japan's Nikkei, which was closed Monday for a holiday, led the way, climbing 14 percent.
Key European exchanges were also up about four percent in early trading, while Russia's main stock market soared more than 11 percent.
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