    [Public Papers of the Presidents of the United States: George W. Bush (2008, Book II)]
    [October 14, 2008]
    [Pages 1305-1306]
    [From the U.S. Government Publishing Office www.gpo.gov]

    Remarks on the National Economy
    October 14, 2008

        Good morning. I just completed a meeting with my Working Group on
    Financial Markets. We discussed the unprecedented and aggressive steps
    the Federal Government is taking to address the financial crisis. Over
    the past few weeks, my administration has worked with both parties in
    Congress to pass a financial rescue plan. Federal agencies have moved
    decisively to shore up struggling institutions and stabilize our
    markets, and the United States has worked with partners around the world
    to coordinate our actions to get our economies back on track.
        This weekend, I met with finance ministers from the G-7 and the G-
    20, organizations representing some of the world's largest and fastest
    growing economies. We agreed on a coordinated plan for action to provide
    new liquidity, strengthen financial institutions, protect our citizens'
    savings, and ensure fairness and integrity in the markets. Yesterday
    leaders in Europe moved forward with this plan. They announced
    significant steps to inject capital into their financial systems by
    purchasing equities in major banks, and they announced a new effort to
    jump-start lending by providing temporary government guarantees for bank
    loans. These are wise and timely actions, and they have the full support
    of the United States.
        Today I am announcing new measures America is taking to implement
    the G-7 action plan and strengthen banks across our country.
        First, the Federal Government will use a portion of the $700 billion
    financial rescue plan to inject capital into banks by purchasing equity
    shares. This new capital will help healthy banks continue making loans
    to businesses and consumers, and this new capital will help struggling
    banks fill the hole created by losses during the financial crisis, so
    they can resume lending and help spur job creation and economic growth.
    This is an essential short-term measure to ensure the viability of
    America's banking system. And the program is carefully designed to
    encourage banks to buy these shares back from the Government when the
    markets stabilize and they can raise capital from private investors.
        Second, and effective immediately, the FDIC will temporarily
    guarantee most new debt issued by insured banks. This will address one
    of the central problems plaguing our financial system. Banks have been
    unable to borrow money, and that has restricted their ability to lend to
    consumers and businesses. When money flows more freely between banks, it
    will make it easier for Americans to borrow for cars and homes and for
    small businesses to expand.
        Third, the FDIC will immediately and temporarily expand Government
    insurance to cover all noninterest-bearing transaction accounts. These
    accounts are used primarily

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    by small businesses to cover day-to-day operations. By insuring every
    dollar in these accounts, we will give small-business owners peace of
    mind and bring stability to the--and bring greater stability to the
    banking system.
        Fourth, the Federal Reserve will soon finalize work on a new program
    to serve as a buyer of last resort for commercial paper. This is a key
    source of short-term financing for American businesses and financial
    institutions. And by unfreezing the market for commercial paper, the
    Federal Reserve will help American businesses meet payroll and purchase
    inventory and invest to create jobs.
        In a few moments, Secretary Paulson and other members of my Working Group on Financial
    Markets will explain these steps in greater detail. They will make clear
    that each of these new programs contains safeguards to protect the
    taxpayers. They will make clear that the Government's role will be
    limited and temporary. And they will make clear that these measures are
    not intended to take over the free market, but to preserve it.
        The measures I have announced today are the latest steps in this
    systematic approach to address the crisis. I know Americans are deeply
    concerned about the stress in our financial markets and the impact it is
    having on their retirement accounts and 401(k)s and college savings and
    other investments. I recognize that the action leaders are taking here
    in Washington and in European capitals can seem distant from those
    concerns. But these efforts are designed to directly benefit the
    American people by stabilizing our overall financial system and helping
    our economy recover.
        It will take time for our efforts to have their full impact, but the
    American people can have confidence about our long-term economic future.
    We have a strategy that is broad, that is flexible, and that is aimed at
    the root cause of our problem. Nations around the world are working
    together to overcome this challenge. And with confidence and
    determination, we will return our economies to the path of growth and
    prosperity.
        Thank you.

    Note: The President spoke at 8:02 a.m. in the Rose Garden at the White
    House. The Office of the Press Secretary also released a Spanish
    language transcript of these remarks.