US plans to halt global banking crisis
- 00:01:57
- ITN
US plans to halt global banking crisis
US Treasury Secretary Hank Paulson has launched a plan to rescue the world from a global banking crisis. Mr Paulson has hatched a plan to rescue banks from their billions of dollars worth of "distressed" mortgage-backed assets which have led to the crisis. The 62-year-old former Goldman Sachs chief is also credited with the decision to offer a $110 billion lifeline to the US mortgage giants Fannie Mae and Freddie Mac. Mr Paulson said: "We must now take further, decisive action to fundamentally and comprehensively address the root cause of our financial system's stresses. He added: "The federal government must implement a program to remove these illiquid assets that are weighing down our financial institutions and threatening our economy." A US Treasury Department programme to buy mortgage-backed securities, which have been badly hurt by the housing and credit crisis, would also be expanded, Mr Paulson said. In New York, the Dow Jones share index opened up more than 3 per cent continuing Thursday's rally. The mood was similar worldwide, with Hong Kong's Hang Seng Index up 9.6 per cent and Japan's Nikkei 225 closing 3.8 per cent higher. In Europe, France's CAC 40 shot up 6.5 per cent and Germany's DAX added 3.9 per cent. In London, the FTSE 100 Index soared more than 8 per cent at one point buoyed by the Financial Services Authority (FSA) imposing a temporary ban on short-selling in financial stocks. The move follows a similar crackdown on short-selling by the US Securities and Exchange Commission, announced this week.
ITN | September 19, 2008
