US to buy stakes in ‘broad array’ of banks: Treasury

WASHINGTON, October 13, 2008 (AFP) – The United States is ready to buy equity in a “broad array” of financial institutions, the Treasury’s pointman on a 700 billion dollar bank bailout, Neel Kashkari, said Monday. “We are designing a standardized program to purchase equity in a broad array of financial institutions,” Kashkari said in a speech to the Institute of International Bankers in Washington.

“As with the other programs, the equity purchase program will be voluntary and designed with attractive terms to encourage participation from healthy institutions,” he said, according to the prepared text.

Kashkari said the program, launched in an effort to combat the worst global financial crisis since the 1929 market crash, would “also encourage firms to raise new private capital to complement public capital.”

He outlined the Treasury’s strategy under the Troubled Assets Relief Program (TARP), the 700 billion dollar financial lifeline created through emergency legislation 10 days ago.

Under the TARP, the government is authorized to take a wide range of exceptional measures, including the purchase of toxic mortgage-related assets from ailing financial institutions in a bid to unclog frozen credit flo