Baja Real Estate & Economy News (CNN) -- U.S. President George W. Bush has announced a $250 billion plan to stabilize the nation's financial system, following in Europe's footsteps.
Using authority granted in the $700 billion bailout bill, Bush said the U.S. Treasury would buy into banks in return for shares.
The world's sharemarkets soared again Tuesday after European governments Monday announced bank bailouts worth more than $1 trillion and in anticipation of a similar move in the United States.
Bush said the measures taken in Europe were right, and had brought stability to the system.
"This new capital will help struggling banks to fill the hole filled by crisis during the time we are in," he said. "This is a short-term measure to insure the viability of America's banking system."
Bush also announced that the Federal Deposit Insurance Corporation (FDIC) would "temporarily guarantee most new debt" issued by banks.
"This will address one of the central problems plaguing our financial system -- banks have been unable to borrow money and that has constricted their ability to lend to consumer and businesses," Bush said.
"When money flows freely between banks, it will make it easy for Americans to borrow money for homes and cars."
The government, through the FDIC, would also immediately and temporarily insure non-interest-bearing transaction accounts which were used mainly by small businesses "to cover day-to-day operations."
"By insuring every dollar in these accounts, we will give small business owners piece of mind and bring greater stability to the banking system," Bush said.
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(CNN) -- U.S. President George W. Bush has announced a $250 billion plan to stabilize the nation's financial system, following in Europe's footsteps.
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