Business | Markets

US tries multiple quick fixes to financial crisis

US government temporarily bans short-selling of company stocks to stem the world's worst financial crisis in decades.

  • AP
  • Published: 17:06 September 19, 2008
  • Gulf News

  • Market specialists and traders have a busy day on the floor of the New York Stock Exchange.
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Washington: The US government on Friday moved on multiple fronts to stem the world's worst financial crisis in decades.

Asian stock markets soared on Friday over news of the US plan to rescue banks from risky mortgage debt.

The Securities and Exchange Commission imposed a temporary emergency ban on all short-selling, not just the aggressive forms it already has targeted.

The Treasury Department asked Congress to give it sweeping power to buy up toxic debt that has unhinged Wall Street.

President George W. Bush authorised the Treasury to tap up to $50 billion fund to insure the holdings of eligible money market mutual funds.

The dramatic action comes as Treasury Secretary Henry Paulson and Federal Reserve Chairman Ben Bernanke are crafting a massive rescue plan to buy up dodgy assets held by troubled banks and other financial institutions at the heart of the financial upheaval.

Congressional leaders said they expected to get the plan Friday and act on it before Congress recesses for the November 4 presidential election.

The chairman of the Senate Banking Committee, Chris Dodd, warned that the United States could be "days away from a complete meltdown of our financial system" and said Congress is working quickly to prevent that.

Dodd told ABC's Good Morning America on Friday that the country's credit is seizing up and people can't get loans.

Senator Richard Shelby, said the US has "been lurching from one crisis to another" and predicted the new bailout plan would cost at least half a trillion dollars.

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