The New York Times reports that Morgan Stanley has "stepped up" merger talks with Wachovia. The Fed moves to pump money into the financial system through lending programs operated by several overseas central banks and the Fed's own moves.
At the same time, the government begins action on the hugest bailout of all, committing hundreds of billions of taxpayer dollars to buy troubled mortgage assets from beleaguered financial institutions.
As word of the evolving plan spreads, stocks rally. The Dow closes up 410 points.
In the evening, Paulson and Bernanke and Securities & Exchange Commission Chairman Christopher Cox go to the US Capitol to brief lawmakers on the plan, which requires congressional authorisation.
Image: US President George W Bush (2nd L), flanked by (L-R) Federal Reserve Chairman Ben Bernanke, US Treasury Secretary Henry Paulson and SEC Chairman Christopher Cox | Photograph: Win McNamee/Getty Images
Also read: SEC's Cox catches blame for financial crisis
Advertisement
