US financial ‘bailout’ approved

9 October 2008

Passed by the US House of Representatives on the second attempt, the US ‘bailout’ legislation was signed into law by the President on October 3rd.

The law allows the US Treasury to spend up to $700 billion on ‘troubled assets’ – such as so-called ‘toxic’ mortgage debts – which should help lenders grant the mortgages, loans and other forms of credit on which the economy depends.

As reported on CNN’s website, Federal Reserve Chairman Ben Bernanke welcomed the news: “The legislation is a critical step toward stabilizing our financial markets and ensuring an uninterrupted flow of credit to households and businesses.”

In a radio speech, Mr. Bush told listeners that “With this legislation, the Federal government can help banks and other financial institutions resume lending. This will allow them to continue providing the capital that is essential to creating jobs, financing college educations, and helping American families meet their daily needs.”

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