The U.S. government's initiative to rescue the struggling U.S. bankingindustry includes four steps to increase the flow of money through thefinancial system.
First, the federal government will offer tobuy non-voting ownership stakes in banks, giving the institutions moremoney to lend to customers. The Treasury Department says nine largefinancial organizations have indicated an interest in the program.
Second,a government agency that insures bank deposits will temporarilyguarantee some loans issued by banks - a step designed to make iteasier for banks to lend money to each other.
The FederalDeposit Insurance Corporation, or FDIC, also will expand insurance tocover accounts that businesses use for daily transactions, such aspaying employees.
In the fourth step, the Federal Reserve willbegin a new program to help fund American corporations by buyingso-called "commercial paper" from them. Commercial paper is a writtenpromise by a company to repay a short term loan often used to financeday to day operations.
These initiativesare designed to be temporary, and come with conditions. For example,the Treasury Department says banks that receive money from the federalgovernment will have to limit the amount of pay they give to executives.