Sunday, September 28, 2008

Bailout Deal Reached

Bailout deal reached, reports WSJ. Incorporates phasing of bailout disbursement, allowance to help big and small financial institutions, including community banks, limitations on executive compensation, and measures to ensure the tax payer comes out ahead (or not too far behind).

Look at this historical example at Real Time Economics.

Bernanke's statement sounds like he learned from his own research (see here and here):

I welcome the agreement by the Congress and the Administration on a comprehensive plan to stabilize our financial system and support our economy. This legislation should help to restore the flow of credit to households and businesses that is essential for economic growth and job creation, while at the same time affording strong and necessary protections for taxpayers. I look forward to swift passage of the legislation.

In addition, the Federal Reserve Board supports the timely actions taken by the Federal Deposit Insurance Corporation, which demonstrate our government's unwavering commitment to financial and economic stability.

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