Bush unveils $250 billion rescue plan

14 October 2008

George Bush has unveiled the details of the $250 billion banking bailout, which will see the US government take stakes in some of the biggest banks on Wall Street.

The US president described the move as "aggressive", adding that he supported measures outlined in other countries in Europe.

The first part of the plan will see the government inject a "portion" of its $700 billion rescue fund into "healthy and struggling banks" through the purchase of shares to allow them to resume lending to businesses and consumers. When the markets return to normal, banks will be able to buy back the government-owned shares, Bush added.

On Monday, a host of European countries - including the UK - pledged their commitment to helping ailing banks and outlined their own rescue schemes.

Earlier this month, the US authorities approved a $700 billion resuce package, which will be used to make the cash injection.

The news has, as yet, had little impact on American stockmarkets; the Dow Jones rose 0.61% in light of the news, while the Standard & Porr's gained 0.43%. The Nasdaq, however, fell nearly 2% following the announcement.

World events

The FTSE 100 jumped 8% yesterday following the government injecting £37 billion into RBS, HBOS and Lloyds TSB, and rose another 188-odd points in the first hour of trading today.

Elsewhere, Japan's Nikkei gained a record 14% while the Dow Jones in the US was up 11%. In France, the Cac 40 was up 4.04%.

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