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For Immediate Release
Office of the Press Secretary
September 29, 2008
Fact Sheet: A Strong Bipartisan Proposal to Stabilize Our Financial System
Congress Announces Bipartisan Agreement On Emergency Economic Stabilization Plan To Restore Stability In The Financial Markets, While Protecting Taxpayers On Main Street
"I appreciate the leadership shown by Members on both sides of the aisle, who came together to write a very good bill. This bill provides the necessary tools and funding to help protect our economy against a system-wide breakdown. The bill will help allow access to credit so American families can meet their daily needs and American businesses can make purchases, ship goods, and meet their payrolls. And this plan sends a strong signal to markets around the world that the United States is serious about restoring confidence and stability to our financial system. Without this rescue plan, the costs to the American economy could be disastrous."
President George W. Bush, 9/28/08
Congressional leaders announced an agreement on a bipartisan compromise to address the Nation's financial crisis. The Administration worked closely with Congressional leaders from both sides of the aisle to reach an agreement quickly on legislation approving the government's purchase of difficult-to-sell assets, such as troubled mortgage-backed securities, from banks and other financial institutions. This agreement is a decisive step that will address underlying problems in our financial system. It will help take pressure off the balance sheets of banks and other financial institutions, and it will allow them to resume lending and get our financial system moving again. Further stress on our financial markets would likely lead to massive job losses, devastated retirement accounts, further erosion of housing values, and reduced availability of loans for new homes, cars, and college tuitions. This new proposal will entail risk, but the risk of not acting would have been far greater.
The Emergency Economic Stabilization Plan Includes Important Provisions Providing Strong Oversight To Protect American Taxpayers And Strengthen Our Financial System
It is expected that much, if not all, of the tax dollars invested by the Federal government into these troubled financial institutions will be paid back over time. Under the purchase program, the government would sell the acquired assets, with the proceeds going back to the Treasury, to offset much, if not all, of the initial cost, and under the program to guarantee troubled assets, the Treasury Department would charge risk-based premiums to cover any anticipated claims.
President Bush Looks Forward To Working With Congress To Stabilize Our Financial System In The Long Term
For many years the President and his Administration have not only warned of the systemic consequences of financial turmoil at a housing government-sponsored enterprise (GSE) but also put forward thoughtful plans to reduce the risk that either Fannie Mae or Freddie Mac would encounter such difficulties. President Bush will continue working with Congress on measures to bring greater long-term transparency and reliability to the financial system. This includes those measures laid out in the regulatory blueprint submitted earlier this year by Secretary Paulson.
Many of the regulations governing America's markets were written in a different era, patched together over the last 75 years in response to market conditions that may no longer exist. It is vital that we update them to meet the realities of today's global financial system.