Treasury Secretary Henry Paulson said he's confident several countries will take steps comparable to the $700 billion plan he proposed to buy bad mortgage-related securities to address the global financial crisis.
“We are talking very aggressively with other countries around the world and encouraging them to do similar things, and I believe a number of them will,'' Paulson said on ABC News' “This Week'' program.
Paulson yesterday asked Congress for unfettered authority to buy devalued mortgage-related securities from investment firms in an effort to keep the financial system from coming to a standstill. The proposal would prevent courts from reviewing the Treasury's actions while raising the nation's debt ceiling.
German Finance Ministry spokesman Stefan Olbermann said members of the Group of Seven industrial nations are in “ongoing talks about the situation on financial markets worldwide.'' Finance ministers from the G-7 countries meet in Washington on Oct. 10.
Asked about the U.S. plan, Olbermann said, “We have to see if and to what extent those measures make sense for Germany.''
The U.K. currently has no plans to set up such a fund, a British Treasury official said.
Prime Minister Gordon Brown today said “in relative terms, we've done a huge amount'' by giving banks access to more than 100 billion pounds ($183 billion) under a Bank of England program that allows them to swap bonds hurt by the collapse of the subprime mortgage market payday loans.
While a French finance ministry spokesman declined to comment on Paulson's latest remarks, Finance Minister Christine Lagarde spoke with U.S. officials during the week and told Europe 1 radio today that the U.S. response had “allowed us to avoid a systemic crisis.''
“We have obstacles to overcome,'' Lagarde said.
The U.S. Treasury late yesterday modified its proposal to allow for purchases from institutions outside of the U.S., a step Paulson today said was needed to mute the impact of the credit crisis in the U.S.
“As you think about this, if a financial institution has business operations in the United States, hires people in the United States, if they are clogged with illiquid assets, they have the same impact on the American people as any other institutions,'' he told ABC News.