U.S. Treasury Secretary Henry Paulson on Friday vowed to “move rapidly” on a $700 billion financial rescue plan passed by Congress giving him authority to buy assets distressed by the housing-market collapse. “The American people will appreciate the leadership of their elected representatives and senators who took bold action to help stem a severe credit crunch that threatens to cost many jobs and undermine access to credit for working Americans,” Paulson said after the House of Representatives approved the legislation. “We will move rapidly to implement the new authorities, but we will also move methodically,” Paulson wrote. In the coming days, Treasury officials would work with the Federal Reserve (Fed) and the Federal Deposit Insurance Corporation (FDIC) “to develop strategies that deploy these tools in an expedited and methodical way to maximize effectiveness in strengthening the financial system, so it can continue to play its necessary and vital role supporting the U.S. economy and American jobs,” Paulson said. The legislation allows the Treasury Department to buy bad debt from U.S. banks, a move that many economists said is needed to avoid financial collapse. Specifically, the Treasury would have $700 billion to purchase bad mortgage-related securities that are hurting financial institutions that hold them, slowing the flow of credit and threatening the ability of businesses to conduct routine operations or expand.
