NAIROBI, October 14 – The US government will spend up to $250 billion to buy shares in struggling banks in the latest effort to stem the global financial crisis, Treasury Secretary Henry Paulson said on Tuesday.
Wall Street shares kept momentum from a historic rally, with the Dow Jones Industrial Average leaping 4.07 percent in the first five minutes a day after the biggest single-day point gain for blue chips and best percentage rally in 75 years.
Other key developments on Tuesday in the world credit crisis:
– Global stock markets soared for a second day running, with Tokyo posting its biggest-ever gain above 14 percent. The London, Paris and Frankfurt markets were up more than two percent in late afternoon trading.
– US President George W. Bush said the US government would temporarily insure all non-interest bearing transaction accounts that benefit small businesses.
– The Bank of Japan announced new steps aimed at thawing frozen bank lending, offering banks unlimited dollar funds, as it left its super-low interest rates on hold at an extraordinary meeting.
– Hong Kong will set up a new system for local banks to access capital, the city\’s financial secretary John Tsang said.
– Drought-stricken Ethiopia urged the world to help millions facing hunger and said Africa should not be forsaken amid the global financial turmoil.
– Shares in Fortis bank were worth barely two euros when they resumed trading for the first time in Brussels and Amsterdam since the group was broken up earlier this month, down over 60 percent from the previous closing price.
– Latin America no longer needs the help of the International Monetary Fund to get out of the global financial crisis, Brazil\’s leftist President Luiz Inacio Lula da Silva said in an interview published in Spain.
– Oil prices rallied back above 80 dollars per barrel, as international banking rescue efforts raised hopes of a global economic recovery and in turn stronger energy demand, dealers said.
– After three full days of suspended trading, a disfigured Icelandic stock exchange, amputated of its once dominant financial stocks that have long made up the cornerstone of the country\’s economy.