New direction for rescue plan

Cash injections favored over mortgage purchases

The Bush administration today announced a change course in its implementation of the $700 billion Troubled Asset Relief Program, with most of the initial $350 billion authorization now earmarked to buy preferred stock in banks rather than mortgage backed securities and whole mortgage loans.

The change in direction — part of a global response to the credit crisis officials said was necessitated by the continued reluctance of banks to loan each other money — is intended to restore lending by recapitalizing banks.