Turmoil in the Housing, Credit and Financial Markets

U.S. Moves Forward on Financial Rescue

“We must also take care to ensure that our actions are closely coordinated and communicated so that the action of one country does not come at the expense of others or the stability of the system as a whole.”
Treasury Secretary Henry Paulson

The United States is in the midst of a serious financial crisis. A plan to address the crisis was proposed through the Emergency Economic Stabilization Act of 2008. The Act, designed to stabilize the U.S. and global financial systems by thawing frozen credit markets and preventing further bank bankruptcies, was passed by the Senate 74-25 on Wednesday, October 1, and by the House of Representatives 263-171 on Friday, October 3. President George W. Bush signed the Act into law on October 3.

The United States has developed an effective and aggressive financial plan to restore stability to the nation’s financial markets, ease a credit crunch that has gripped the nation’s economy, and help world economies stabilize, President Bush said.

The plan amounts to the largest government intervention in the financial markets since the Great Depression of the 1930s; it will reshape the financial and related industries and is likely to have a significant impact on the U.S. economy.

Within the Act, the U.S. Department of the Treasury was granted authority/oversight of the program to resolve the financial crisis. The Department of Treasury will be using the $700 billion approved October 3 to restore confidence in the markets by buying up or insuring troubled assets in financial institutions. You may wish to view information on how the U.S. Treasury plans to carry out the authority it has been given.

The House Committee on Oversight and Government Reform will hold five hearings during the month of October on the causes and impacts of the financial crisis. Please find here the latest news on the committee’s work.

For additional information or resources, please view the following:

• U.S. Government Actions to Strengthen Market Stability (October 14, 2008)
• President Bush Meets with G7 Finance Ministers to Discuss World Economy (October 11, 2008)
• Statement by Secretary Henry M. Paulson, Jr. on Financial Markets Update (October 8, 2008)
• Deputy Secretary of the Treasury Robert M. Kimmitt’s Laudation of Dr. Jürgen Weber, Recipient of the AmCham Transatlantic Partnership Award (pdf - October 10, 2008)
• Recent Actions Taken by the Federal Reserve (October 6, 2008)
• Statement by President Bush on the House passage of the "Emergency Stabilization Act of 2008" (October 3, 2008)
• Statement by Secretary of the Treasury Paulson on the House passage of the "Emergency Stabilization Act of 2008" (October 3, 2008)
• President George W. Bush's Address to the Nation (September 24, 2008)
• G-7 Countries Joint Statement on Global Financial Market Turmoil (September 22, 2008)
• Treasury Department Fact Sheet on Assets Buyout (September 20, 2008)

Also check out our selection of recent articles and reports from leading U.S. journals and policy sources (“InfoAlert”)