United States: The bank-rescue plan prepared by US President Barack Obama’s administration was delayed for yet another day. The plan — also called a “bad bank” plan by many — was intended to create a separate bank that would transfer the bad debts of all other banks on its balance sheet in a bid to unfreeze credit.
Dow Jones drastically went down by around 300 points after this announcement and all other stock market went down by more than 3%.
“We are going to have to work with the banks in an effective way to clean up their balance sheets so that some trust is restored within the marketplace, because right now part of the problem is that nobody really knows what’s on the bank’s books. Any given bank, they’re not sure what kinds of losses are there. We’ve got to open things up and restore some trust,” Obama said.
Obama also urged members of the Congress to pass the USD 838 billion stimulus plan, which cleared the key test vote in the Senate by 61-36 despite strong republican opposition.
Leave a comment