Bush Reveals New Steps To Steady Banking Industry - Cleveland 19 News Cleveland, OH

Bush Reveals New Steps To Steady Banking Industry

WASHINGTON (AP) - President Bush on Tuesday announced a $250 billion plan by the government to directly buy shares in the nation's leading banks, saying the drastic steps were "not intended to take over the free market but to preserve it."

Nine major banks will participate initally including all of the country's largest institutions. Some of the big banks had to be pressured to participate in the program by Treasury Secretary Henry Paulson, who wanted healthy institutions that did not necessarily need capital from the government to go first as a way of removing any stigma that might be associated with banks getting bailouts.

Bush, in brief remarks in the Rose Garden of the White House, said the government will initially buy stocks in nine major U.S. banks.

"These efforts are designed to directly benefit the American people by stabilizing the financial system and helping the economy recover," he said.

Paulson, at a news conference a short time later, said "today's actions are what we must do to restore confidence in our financial system."

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