US Treasury secretary Timothy Geithner has announced a plan to take $500 billion (€387 billion) in bad assets off the books of struggling banks and expand a Federal Reserve programme to support up to $1 trillion in asset-backed securities.
Timothy Geithner said the American public had lost confidence in a $700 billion bailout plan launched by the Bush administration and in the leaders of the country's top financial institutions.
There will also be sweeping overhaul of the government's effort to rescue the banking system, promising to generate up to $2 trillion (€1.55 trillion) in public and private money to absorb toxic assets and get credit moving again.
The new plan aims to stabilise the financial system by pumping capital into banks, helping to determine prices of toxic assets weighing on companies' balance sheets and slowing the rate of home repossessions.