US rescue deal may help loans market
29 September 2008
The fate of the US’ $700bn rescue deal will affect loan and mortgage markets all over the world.
The deal was designed to allow the US Treasury to buy up troubled assets (also known as ‘bad loans’) from financial institutions in an attempt to revitalise financial institutions, enabling them to loan money to each other.
This would, in theory, ease the global liquidity crisis, helping individuals access loans.
However, the rescue package has met with resistance in the US Congress, where many politicians question not just its cost but also its effectiveness. So far, it’s unclear what kind of changes they will demand, what kind of compromise will be reached, and what effect it will end up having on loan markets.
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