U.S. Gov't May Invest in Banks

10-09-2008

U.S. Treasury Secretary Henry Paulson indicated the government may invest in banks as the next step in trying to resolve the deepening credit crisis, reports Bloomberg News.

Paulson told reporters in Washington that legislation Congress passed last week to rescue financial institutions gave him broad authority that he intends to use, beyond just buying mortgage-related assets on banks' balance sheets. One option available may be boosting companies' capital with cash infusions.

“It is the policy of the federal government to use all resources at its disposal to make our financial system stronger,” Paulson said. “We will use all of the tools we've been given to maximum effectiveness, including strengthening the capitalization of financial institutions of every size.”

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