The most important points of the US plan announced Tuesday, according to dpa, to inject up to 2 trillion dollars into the US finance and banking system: - Government and private investors are to provide 500 billion dollars for a start fund which could grow to 1 trillion dollars, to absorb bad mortgage assets. This so-called "bad bank" would serve to relieve the banks of the liabilities so that they can begin lending money again. - The US Federal Reserve is to dramatically expand a programme designed to revive consumer loans for cars, university tuition, small businesses and credit cards. The Fed's Term Asset-Backed Securities Loan Facility could be scaled up from 200 billion dollars to 1 trillion dollars. - The Obama administration has already committed at least 50 billion dollars to help more homeowners from falling into foreclosure. - Troubled banks would receive further injections of capital, in exchange for accepting stricter requirements that they actually lend out the money. Added transparency would be required, and strict limits would be placed on executive salaries. - Banks which receive government money would have to go through a "stress-test" to evaluate their balance sheet exposure to the mortgage crisis and whether they need more capital.
