Question: Please explain President Bush’s plan to rescue the U.S. economy.
Ambassodor: As President Bush said, "All of us recognize that this is a serious global crisis which requires a serious global response for the good of our people." Therefore, President Bush will host a G-20 Financial Summit in Washington on November 15. The G-20 leaders will review the progress that is being made to address the current financial crisis, advance a common understanding of its causes, and agree on a common set of principles for reform of the regulatory and institutional regimes for the world's financial sectors.
At home, the President has signed into law the Emergency Economic Stabilization Act of 2008. Part of the new law establishes the Troubled Asset Relief Program (TARP), which is intended to restore capital flows to the consumers and businesses that form the core of the U.S. economy. Achieving this goal will require multiple tools to help financial institutions remove illiquid assets from their balance sheets, and attract both private and public capital. The TARP has several parts, including a mortgage-backed securities purchase program; a loan purchase program to help regional banks holding residential mortgage loans; an insurance program to insure troubled assets; an equity purchase program to buy equity stakes in financial institutions; a homeownership preservation program; limits on executive compensation for firms that participate in the TARP; and new oversight and compliance structures.
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