US to 'press' countries to forge financial bailouts: Paulson
WASHINGTON (AFP) — The United States is pressing other countries to forge bailouts for their financial institutions similar to the unprecedented 700-billion-dollar rescue it is planning for Wall Street, US Treasury Secretary Henry Paulson said Sunday.
Paulson said the Treasury's proposal to Congress for authority to spend 700 billion dollars to buy toxic mortgage-related assets from financial institutions could serve as a blueprint for foreign authorities.
"I'm also going to be pressing our colleagues around the world to design similar programs for their banks and institutions when they are appropriate," Paulson said in an interview on Fox television.
Paulson did not provide further details, but US financial authorities have been working closely with their counterparts in Europe and Japan over the past 10 days to prevent a collapse of the interwoven global financial system.
British Prime Minister Gordon Brown said on Friday that his government would "do everything in our power to ensure the stability of the (financial) system."
Britain's Financial Services Authority acted rapidly Thursday to halt short-selling in financial shares -- when investors borrow company stock to sell it in anticipation of profiting from a fall in value -- and Brown said other actions were being considered.
"We are now working with our international partners about broader intervention we are in a position to take," he said.
Paulson also clarified that the US bailout plan sent to Congress on Friday and centered on a government purchase of toxic mortgage-based assets would also cover non-US institutions with operations in the United States.
"Obviously, we'd want to buy from financial institutions that are employing people, and are an important part of our economy," he said.
"Because to the American people, if an institution is doing business here is clogged, and can't perform the role they need to do, it's a distinction without a difference -- whether it's a foreign or a US-owned," he said.
"Remember, our system is a global one."
Paulson also said that the intent of the plan submitted to Congress "right now wouldn't be to buy from hedge funds" -- private investment funds that specialize in aggressive risk-taking.
Regarding the unprecedented rescue plan unveiled to Congressional leaders late Friday, Paulson, a former Goldman Sachs president, said: "I hate the fact that we have to do it."
"This is a humbling, humbling time for the United States of America as we go around the world and talk to people about our financial system. We'll work through this. We need to stablize it first and take steps to clean things up."