Embassy of the United States

Current US Economic Policy

U.S. Acting Aggressively to Stem Market Instability, Bush Says     Global financial markets continue showing turbulence as governments intercede to stem instability.   Bush will meet with G7, IMF and World Bank officials By Merle D. Kellerhals, Jr. Staff Writer October 10, 2008 Washington — The United States has developed an effective and aggressive financial plan to restore stability to the nation’s financial markets, ease a credit crunch that has gripped the nation’s economy, and help world economies stabilize, President Bush says. Bush will meet with finance ministers from the Group of Seven major industrialized economies before and during the annual meetings of the International Monetary Fund and the World Bank in Washington October 10-12. “We’re working closely with partners around the world to ensure that our actions are coordinated and effective,” Bush said in remarks at the White House October 10. Treasury Secretary Henry Paulson will meet with finance ministers from the world’s 20 leading economies. “Through these efforts, the world is sending an unmistakable signal: We’re in this together and we’ll come through this together,” Bush said. The U.S. Federal Reserve has joined with central banks around the world to coordinate cuts in key interest rates to encourage banks to lend money and create credit.  And the Fed has announced a program to support the commercial paper market, a short-term mechanism used by businesses to raise funds. “As the new program kicks in over the next week or so, it will help revive a key source of short-term financing for American businesses and financial institutions,” Bush said. The Treasury will be using the $700 billion approved October 3 to restore confidence in the markets by buying up or insuring troubled assets in financial institutions. “The federal government has a comprehensive strategy and the tools necessary to address the challenges in our economy,” Bush said. Government insurance on bank and credit union deposit accounts has been raised to $250,000, and for the first time the Treasury is offering insurance on money market mutual funds, Bush said. “The plan we are executing is aggressive.  It is the right plan.  It will take time to have its full impact,” he said. And Bush said the Securities and Exchange Commission will institute rigorous enforcement actions to detect fraud and manipulation in the financial markets. “The SEC is focused on preventing abusive practices, such as putting out false information to drive down particular stocks for personal gain,” he said. Two programs created recently have helped more than 2 million Americans avoid foreclosure on their mortgages and stay in their homes, Bush said.