Paulson Gives Details on Capital Injection to Banks
Treasury Secretary Henry Paulson in a news conference at 11:30 EST spoke about the government's $250 billion capital injection program to financial institutions, saying it "wont cost taxpayers anything." Paulson says that those banks participating in infusion are expected to strengthen efforts to help homeowners avoid foreclosures.
Paulson said the government will own shares in the banks and should be paid back with a reasonable return. The government will also receive warrants for common shares in the banks.
He made his comments as he announced a streamlined application process that banks can follow to apply to sell shares to the government by a deadline of Nov. 14.
The Treasury last week announced that it was investing $125 billion in nine of the largest U.S. banks, acquiring preferred stock. It intends to create a systematic program under which a broad range of financial institutions can access U.S. government capital.
The plan is part of a $700 billion financial bailout package approved this month by Congress.
Published on October 20, 2008
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