US unveils new economic programmes

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Source: CCTV.com | 11-26-2008 09:10

The US has unveiled two new programmes worth 800 billion US dollars to boost consumption and revive its ailing economy.

The new programmes represent a modification to the largest US government economic bailout in history.

U.S. Treasury Secretary Henry Paulson speaks at a news conference at the Treasury Department in Washington, November 25, 2008.(Jason Reed/Reuters)

US Treasury Secretary, Henry Paulson, unveiled a programme that will provide 200 billion US dollars to help unfreeze the credit market. And the Federal Reserve will offer another 600 billion dollars in funding for new mortgages to help stimulate the US housing market.

The two programmes will cover all types of consumer and small business loans from mortgages to credit cards. The action symbolizes a change of bailout focus from financial institutions to the consumer market.

Paulson defended the changes aimed at tackling the lending crisis. Key markets supporting consumer debt in such areas as credit cards, auto loans and student loans essentially frozen up in October.

Henry Paulson, US Treasury Secretary, said, "There are two issues that people sometimes confuse but they're very closely related. There is the strength and the stability of our financial system and it's very important that that system remain stable and strong and lending is very important to consumers. And secondly is the economy and what has gone on in the financial system is impacting the economy. And as the economy is turning down, it is very important the lending continue to be available."

Paulson also called for patience and cautioned against expecting quick results from the new programmes.

Henry Paulson, US Treasury Secretary, said, "Remember that 200 billion is a starting point. This is, it's going to take a while to get this programme up and going and then it can be expanded and increased over time. It can be expanded to include new commercial mortgage back securities that are highly rated or new highly rated residential mortgage backed securities. It can be expanded to just be bigger within the asset classes we've laid out but the first thing is to get it up and going."

Paulson says he will keep working closely with New York Federal Reserve Bank President Timothy Geithner, nominated by President-elect, Barack Obama, to take over Treasury.

Editor:Zhang Pengfei