Shares Markets in Asia and Europe gained after the announcement by the US government that it was taking over troubled mortgage giants Freddi Mac and Fannie Mae. US president George Bush said that the two mortgage lenders posed an unacceptable risk to the economy.
It is hoped that this largest bail-out in US history which could cost the Federal government $200bn would prop up the country’s housing market and end the credit crunch. Investors worldwide believed that a collapse could have a ripple effect on financial markets which could have resulted in major losses by major banks.
The plan announced by the Treasury secretary, placed the two companies into a “conservatorship” to be overseen by Federal Housing Finance Agency. The government would temporarily run Freddi Mac and Fannie Mae until they are on a stronger footing.
Japan and Australia have welcomed the move and said that this move would stabilize the financial markets.
Shares Markets in Asia and Europe gained after the announcement by the US government that it was taking over troubled mortgage giants Freddi Mac and Fannie Mae. US president George Bush said that the two mortgage lenders posed an unacceptable risk to the economy.
It is hoped that this largest bail-out in US history which could cost the Federal government $200bn would prop up the country’s housing market and end the credit crunch. Investors worldwide believed that a collapse could have a ripple effect on financial markets which could have resulted in major losses by major banks.
The plan announced by the Treasury secretary, placed the two companies into a “conservatorship” to be overseen by Federal Housing Finance Agency. The government would temporarily run Freddi Mac and Fannie Mae until they are on a stronger footing.
Japan and Australia have welcomed the move and said that this move would stabilize the financial markets.
Related
