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U.S. to purchase stake in banks

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U.S. Treasury Secretary Henry Paulson emerged from a meeting with officials from the Group of Seven (G-7) major industrialized nations today and announced the United States will purchase stock in banks and financial firms for the first time since the Great Depression.The government will buy nonvoting shares as part of a program "designed to encourage the raising of new private capital to complement public capital," Paulson said. The president's Working Group on Financial Markets is developing a standardized investment program that will be open "to a broad array of financial institutions," Paulson said. Critics of the Bush administration's plan to borrow up to $700 billion to purchase troubled assets from banks and financial institutions say it won't "recapitalize" them quickly enough to unfreeze credit markets and prevent the financial crisis from deepening.While this week's sell-off in global stock exchanges has grabbed headlines, some economists see the...