‘US financial rescue package not a panacea’

Wednesday, November 19, 2008 at 4:11 am

The $700 billion US financial bailout programme is “not a panacea” to cure economic woes, US Treasury Secretary Henry Paulson told lawmakers on Tuesday (November 18), amid growing calls for help for other sectors.

“The purpose of the financial rescue legislation was to stabilise our financial system and to strengthen it. It is not a panacea for all our economic difficulties, Paulson said at a hearing of the House of Representatives Financial Services Committee.

Paulson, Federal Reserve chairman Ben Bernanke and Federal Deposit Insurance Corporation chairwoman Sheila Bair were called to testify before the House panel about the $700 billion Troubled Asset Relief Programme (TARP) authorised by Congress on October 3.

Amid growing calls for rescue of ailing automakers, the Democratic-controlled Congress opened a “lame duck” session Monday vowing to fight for a new loan program for the auto industry. The chairmen and chief executives of General Motors, Ford and Chrysler were to plead their case today before the Senate Banking, Housing and Urban Affairs Committee.

Paulson acknowledged the spillover from the global financial crisis was battering the economy, but stressed the rescue focus should remain on the financial sector. “The crisis in our financial system had already spilled over into our economy and hurt it. It will take a while to get lending going and repair our financial system, which is essential to an economic recovery.”

(With inputs from agencies)

( This post is from an independent writer. The opinions and views expressed herein are those of the author and are not endorsed by APakistanNews.Com.)

‘US financial rescue package not a panacea’

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