Advertisement
Help
You are here: Rediff Home » India » Business » Report
Search:  Rediff.com The Web
  Advertisement
      Discuss  |             Email   |         Print  |  Get latest news on your desktop

Scope of $700 bn may be broadened: WSJ
 
 · My Portfolio  · Live market report  · MF Selector  · Broker tips
Get Business updates:What's this?
  Advertisement
November 04, 2008 15:01 IST

The US Treasury Department is considering using more of its $700-billion rescue fund to buy stakes in a broad range of financial companies apart from banks and insurers, after tentative signs of the programme's success, a media report said on Tuesday.

In focus, said the Wall Street Journal, are companies that provide financing to the broad economy, including bond insurers and speciality finance firms such as General Electric Co's GE Capital unit, CIT Group Inc and others.

The paper said and quoted people familiar with the matter as saying that the treasury may scrap part of the early plan -- purchasing financial institutions' hard-to-sell assets such as mortgage-backed securities through an auction process -- and instead purchase some of these distressed assets directly.

Of the original $700 billion made available to the treasury, officials set aside $250 billion for equity investments.

It has already invested $163 billion in a range of banks including some of the nation's largest, such as Goldman Sachs and Bank of America.

That number might expand at the expense of the asset-purchase plan, but by exactly how much is unknown, the Journal reported.

"We are looking at many ideas for strengthening the financial system and for restoring lending," Jennifer Zuccarelli, a treasury spokeswoman, was quoted as saying.

"We are weighing ideas and have made no decisions."

Treasury's planning, said the paper, could be complicated by Tuesday's election as Paulson wants to involve the next administration in major decisions between now and January.

Both John McCain, the Republican nominee and Barack Obama, the Democratic nominee voted for the $700-billion rescue plan but a new administration is certain to have its own ideas about how best to use the remaining $450 billion, the Journal said.


© Copyright 2008 PTI. All rights reserved. Republication or redistribution of PTI content, including by framing or similar means, is expressly prohibited without the prior written consent.
       Email  |        Print   |   Get latest news on your desktop

© 2008 Rediff.com India Limited. All Rights Reserved. Disclaimer | Feedback