| October 10, 2008 Paulson endorses bank stock purchase plan
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WASHINGTON (AP) - Treasury Secretary Henry Paulson said Friday
that the Bush administration will move ahead with a plan to buy
stock in financial institutions.
Paulson said the program to purchase stock in financial
institutions will be open to a broad array of institutions.
The administration received the authority to make direct
purchases of stock in banks in the $700 billion measure Congress
passed last week to rescue the nation's financial system.
It would mark the first time the government has taken equity
ownership in banks in this manner since a similar program was
employed during the Great Depression.
Paulson announced said the administration was moving forward
with the program during a news conference at the conclusion of
discussions among finance officials of the Group of Seven major
industrialized countries. That group endorsed the outlines of a
sweeping program to combat the worst global credit crisis in
decades.
"As we develop plans to purchase equity ... we are working to
develop a standardized program that is open to a broad array of
financial institutions," Paulson said in a statement.
Paulson said the government's program would be designed to
complement the efforts of banks to raise fresh capital from private
sources. He said that the government's stock purchases would be of
nonvoting shares so that the government will not have power to run
the companies.
The purchase of equity stakes in companies would be in
