Bank Execs Summoned to Hash Out Bailout Details

By Pamela Mortimer

Treasury Department spokeswoman Brookly McLaughlin said officials from the Federal Reserve and the Treasury Department would participate in a meeting at the Treasury Department to discuss the details of the $700 billion rescue package designed to stabilize the plummeting financial market. Part of the plan is for the federal government to take partial ownership of the banks and to purchase bad debts from financial institutions. President Bush believes that the plan will allow financial institutions to acquire the necessary capital to unfreeze lending and suffering credit markets.

"These are tough times for our economies yet we can be confident that we can work our way through these challenges and America will continue to work closely with the other nations to coordinate our response to this global financial crisis," Bush said following a meeting with Italian Premier Silvio Berlusconi.

While Washington was in the midst of discussions about the rescue package, the EU took swift action to solve the problem of frozen lending in an attempt to thaw out the global economy. As a result of the talks, The Dow Jones went up by more than 500 points. European markets also improved after Asia responded to widespread government initiatives.

Neel Kashkari is acting as the interim chief of the bailout package. Kashkari said the government is making fast strides toward the implementation of the rescue program, which includes consultations with private law firms on the best practices of how to buy partial ownership in banks to boost waning cash reserves.

The European Central Bank, Bank of England and the Swiss National Bank have announced they would work together to provide unlimited short-term funds to ensure monies are available to take the sting out of the credit freeze. The Bank of Japan is also considering a similar course of action. European governments plan to earmark nearly $2 trillion to protect their financial institutions.

"The government cannot just leave people on their own to be buffeted about," said British Prime Minister Gordon Brown.

While the federal government appreciates Europe’s stance, Bush said it will take a lot of effort to show each government’s resolve in dealing with the crisis.

"We must all act decisively, individually and collectively, according to our needs, to secure stability and growth for the world economic and financial order," Treasury Secretary Henry Paulson said in statement.