Treasury chief Henry Paulson has announced plans to buy up shares in America's troubled banks, Reuters reports. The government will purchase equity in banks "as soon as possible," using some of the $700 billion approved by Congress to rescue the economy, Paulson said yesterday after a crisis meeting with G7 finance ministers.
The capital injection—modeled on a radical new strategy launched by Britain last week—would be available to "a broad array" of institutions. The government would buy only non-voting shares under the plan, and sources say Paulson does not intend to seek seats on banks' boards of directors. The G7 has agreed to work together closely on an "aggressive action plan" to unfreeze credit markets, Paulson said.