US Treasury pushes $700bn rescue plan

The US Treasury is looking to push through a $700bn rescue plan to buy up bad debt from US financial institutions.

The troubled asset relief programme would see the US Treasury issue up to $700bn (£380bn) of Treasury securities to fund the purchase of toxic mortgage-backed securities and whole loans.

To qualify for the programmes assets must have been originated or issued before September 17, 2008. The plan is still subject to approval by Congress, the US legislative body.

Speaking to US television channel NBC yesterday Henry Paulson, US Treasury secretary, says: “I wouldn’t bet against the American people and I wouldn’t bet against the long-term fundamentals of this country.

“But this is a humbling experience to see such fragility in capital markets and to ask how did we ever get here.”