Paulson to Banks: Do It for Your Country

The $250 billion plan to guarantee new bank debt and unlimited bank deposits in certain accounts isn’t just an option, Treasury Secretary Paulson told the chiefs of nine banks yesterday; it’s for the good of the country. The plan, the country’s response to similar European banking actions, is engineered to quash feats that US banks will default and keep capital from flowing overseas to safer banks, the New York Times reports.

“The Europeans not only provided a blueprint, but forced our hand,” Kenneth Rogoff, a Harvard economist and McCain adviser, said. “We’re trying to prevent wholesale carnage in the financial system.”
(More financial crisis stories.)