US lawmakers worked on a revised US$700 billion bank bailout ahead of a vote scheduled for late yesterday, sparking a global stock surge but banks around the world still faced a desperate struggle to find credit.
European policymakers yesterday urged the US Senate to approve the revised rescue plan.
The revised package, which the Senate will vote on sometime after 7:30pm, would increase the amount of federal insurance for individual deposits guaranteed from US$100,000 to US$250,000 in a bid to build Republican support.
But the main aim of the package remains unchanged — to allow the US Treasury to buy toxic mortgage-related assets from banks in a bid to unlock credit markets and head off deeper economic damage.
Analysts said a rebound in stock markets over the past two days indicated renewed hopes that the Senate would pass the deal, a move which would put pressure on the House of Representatives to follow suit when it meets later today.
The House threw out on Monday the initial plan assembled by Treasury Secretary Henry Paulson amid anger that ordinary taxpayers were being asked to bail out the banking industry.
Senate Majority leader Harry Reid said: “Senate Democrats and Republicans believe it is essential that we work quickly on this important legislation to restore confidence to our financial system and strengthen the economy.”
Senate Banking Committee Chairman Chris Dodd said that some of those who had rejected the bailout plan “are having second thoughts.”
Jean-Claude Juncker, chairman of the eurozone’s finance ministers, said yesterday that the US had to adopt the plan, a view echoed by Russian Finance Minister Alexei Kudrin.
“It is the responsibility of the United States to other countries,” Kudrin said.
Juncker also said the leaders of Germany, France, Britain and Italy would meet in Paris on Saturday, although he insisted that “there is no threat” to Europe’s banking system, because its banking system was not in the same “dramatic” state.
Economists warned, however, that much of the global interbank lending market was virtually closed and this was now at the heart of the crisis.
European Central Bank (ECB) President Jean-Claude Trichet alluded to this in a speech late on Tuesday, saying: “Let me emphasize that the ECB will continue to support solvent banks’ access to liquidity and the functioning of the money market as long as necessary.”
Analysts expect the ECB to hold its key rate at 4.25 percent at a meeting today, but some said new shock therapy was needed.
News that the US Senate would vote on a bailout plan energized stock markets yesterday. London shares opened 1.45 percent higher, Frankfurt stocks rose 0.10 percent and French stocks 0.46 percent.
Also See: Candidates call for unity on bailout
Also See: Whoever inherits the financial crisis, he’ll have to get it right
Also See: FDIC urges temporary rise in deposit insurance limit
CALL FOR SUPPORT: President William Lai called on lawmakers across party lines to ensure the livelihood of Taiwanese and that national security is protected President William Lai (賴清德) yesterday called for bipartisan support for Taiwan’s investment in self-defense capabilities at the christening and launch of two coast guard vessels at CSBC Corp, Taiwan’s (台灣國際造船) shipyard in Kaohsiung. The Taipei (台北) is the fourth and final ship of the Chiayi-class offshore patrol vessels, and the Siraya (西拉雅) is the Coast Guard Administration’s (CGA) first-ever ocean patrol vessel, the government said. The Taipei is the fourth and final ship of the Chiayi-class offshore patrol vessels with a displacement of about 4,000 tonnes, Lai said. This ship class was ordered as a result of former president Tsai Ing-wen’s (蔡英文) 2018
UKRAINE, NVIDIA: The US leader said the subject of Russia’s war had come up ‘very strongly,’ while Jenson Huang was hoping that the conversation was good Chinese President Xi Jinping (習近平) and US President Donald Trump had differing takes following their meeting in Busan, South Korea, yesterday. Xi said that the two sides should complete follow-up work as soon as possible to deliver tangible results that would provide “peace of mind” to China, the US and the rest of the world, while Trump hailed the “great success” of the talks. The two discussed trade, including a deal to reduce tariffs slapped on China for its role in the fentanyl trade, as well as cooperation in ending the war in Ukraine, among other issues, but they did not mention
Japanese Prime Minister Sanae Takaichi yesterday lavished US President Donald Trump with praise and vows of a “golden age” of ties on his visit to Tokyo, before inking a deal with Washington aimed at securing critical minerals. Takaichi — Japan’s first female prime minister — pulled out all the stops for Trump in her opening test on the international stage and even announced that she would nominate him for a Nobel Peace Prize, the White House said. Trump has become increasingly focused on the Nobel since his return to power in January and claims to have ended several conflicts around the world,
GLOBAL PROJECT: Underseas cables ‘are the nervous system of democratic connectivity,’ which is under stress, Member of the European Parliament Rihards Kols said The government yesterday launched an initiative to promote global cooperation on improved security of undersea cables, following reported disruptions of such cables near Taiwan and around the world. The Management Initiative on International Undersea Cables aims to “bring together stakeholders, align standards, promote best practices and turn shared concerns into beneficial cooperation,” Minister of Foreign Affairs Lin Chia-lung (林佳龍) said at a seminar in Taipei. The project would be known as “RISK,” an acronym for risk mitigation, information sharing, systemic reform and knowledge building, he said at the seminar, titled “Taiwan-Europe Subsea Cable Security Cooperation Forum.” Taiwan sits at a vital junction on
RSS