US unveils $500b bank clean-up, mkts soar
Tuesday, 24 March 2009
WASHINGTON, Mar 23 (AFP): The United States (US) unveiled a $500-billion programme to rid troubled banks of their bad assets, winning immediate approval from investors on Monday as stock markets soared.
US Treasury Secretary Timothy Geithner wrote in The Wall Street Journal that the initiative would set up a market for troubled loans and securities, freeing up banks to lend again.
In another positive development, President Barack Obama also said he could see 'flickers of hope' for the recession-hit US economy and expressed cautious optimism over a quick recovery.
"Well, we're already starting to see flickers of hope out there," Obama told CBS's '60 Minutes'.
"Now there's a potential silver lining, which may be that things are so accelerated now, the modern economy is so intertwined and wired, that things happen really fast -- for ill, but things may recover faster than they have in the past," he added.
Markets cheered the latest news from the United States, with Japan's Nikkei index closing up 3.39 per cent at a nearly two-month high on the back of the banking plan.
Meanwhile, another AFP report from Beijing adds: US Treasury bonds will remain central to China's plans for investing its massive foreign exchange holdings, a deputy governor of the Chinese central bank said Monday.
"Investing in US Treasury bonds is an important element in China's investment strategy and we will continue this practice," Hu Xiaolian told journalists.
China has been the top holder of US Treasury bonds since September, when it overtook Japan for the first time, according to US data.
As of late January, it had accumulated a total of $739.6 billion in US Treasury bonds, the most recent data from the US government showed.
Some Chinese commentators have voiced frustration that Beijing has been unable to find higher-yielding investment targets for its huge forex reserves.
US Treasury Secretary Timothy Geithner wrote in The Wall Street Journal that the initiative would set up a market for troubled loans and securities, freeing up banks to lend again.
In another positive development, President Barack Obama also said he could see 'flickers of hope' for the recession-hit US economy and expressed cautious optimism over a quick recovery.
"Well, we're already starting to see flickers of hope out there," Obama told CBS's '60 Minutes'.
"Now there's a potential silver lining, which may be that things are so accelerated now, the modern economy is so intertwined and wired, that things happen really fast -- for ill, but things may recover faster than they have in the past," he added.
Markets cheered the latest news from the United States, with Japan's Nikkei index closing up 3.39 per cent at a nearly two-month high on the back of the banking plan.
Meanwhile, another AFP report from Beijing adds: US Treasury bonds will remain central to China's plans for investing its massive foreign exchange holdings, a deputy governor of the Chinese central bank said Monday.
"Investing in US Treasury bonds is an important element in China's investment strategy and we will continue this practice," Hu Xiaolian told journalists.
China has been the top holder of US Treasury bonds since September, when it overtook Japan for the first time, according to US data.
As of late January, it had accumulated a total of $739.6 billion in US Treasury bonds, the most recent data from the US government showed.
Some Chinese commentators have voiced frustration that Beijing has been unable to find higher-yielding investment targets for its huge forex reserves.