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U.S. Treasury agrees to pour more money into major banks
Last Updated(Beijing Time):2009-02-26 11:53
U.S. Treasury Department announced on Wednesday that the nation's largest banking institutions can get further support from the government's 700 billion dollar financial bailout fund.

The new support, named as the Capital Assistance Program (CAP),will be provided through the government's purchase of preferred shares of the bank stock that are convertible into common shares at a 10 percent discount to their price before Feb. 9.

"In light of the current challenging market environment, the Treasury is making government capital available immediately through the CAP to eligible banking institutions to provide this buffer," said a statement released by the Treasury.

Under CAP, federal banking supervisors will conduct forward-looking assessments to evaluate the capital needs of the major U.S. banking institutions under a more challenging economic environment, said the statement.

Should that assessment indicate that an additional capital buffer is warranted, banks will have an opportunity to turn first to private sources of capital, it added.

Eligible U.S. banking institutions with assets in excess of 100billion dollars on a consolidated basis are required to participate in the coordinated supervisory assessments, and may access the CAP immediately as a means to establish any necessary additional buffer.

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