The Bush administration is planning to greatly expand protections for the U.S. banking system out of deep concern about the faltering economy.
That's according to an industry official who is knowledgeable about a Treasury Department meeting with banking executives Monday.
The official says the administration will use perhaps as much as $250 billion of the $700 billion bailout program to purchase stock in U.S. banks. The intent is to provide the banks with desperately needed money. In addition, the Federal Deposit Insurance Corporation will temporarily provide insurance for loans between banks, charging the banks a premium for doing so. The official says the FDIC is also considering temporarily removing the current $250,000 limit on FDIC insurance on bank deposits.
President Bush is expected to announce the expansion Tuesday morning.
(Copyright 2008 by The Associated Press. All Rights Reserved.)