AT A GLANCE: Bush: Advisers, Congress To Begin Working On Rescue Plan
Tuesday September 30th, 2008 / 15h26
THE EVENT: President George W. Bush used Monday's stunning drop in U.S. equity markets to argue the need for quick congressional action on a financial market rescue plan and said his advisers will begin working with Congress Tuesday on a new solution that could begin to move as soon as Wednesday. "The reality is that we're in an urgent situation," Bush said, "and consequences will grow worse each day if we do not act. If our nation continues on this course, the economic damage will be painful and lasting." MARKET REACTION: U.S. stocks opened higher as investors hoped a revised financial rescue plan will emerge. Crude oil futures were up more than $2. Treasurys are trading lower while the dollar is higher vs. the euro. OTHER NOTABLE NEWS: CHANGES AT SOVEREIGN: Sovereign Bancorp Inc. (SOV), the embattled regional bank whose shares have declined sharply, plans to name a new chief executive as early as Tuesday, The WSJ reported in its Tuesday edition. SHORT-TERM FUNDING PRESSURE: The cost of borrowing overnight U.S. dollar funds in the interbank market surged Tuesday. The London interbank offered rate, or Libor, that banks charge each other for such loans climbed to 6.875%, the British Bankers' Association said. The commercial paper market, where companies raise short-term financing, also felt the pressure of tightening conditions. One trader at a primary dealer said volumes were down 40% from Monday and overnight rates on asset-backed commercial paper jumped to 6% to 7.5% from 2% for better-rated companies on Monday. OBAMA, MCCAIN PROPOSALS: Democrat Barack Obama Tuesday said federal deposit insurance for U.S. families and small businesses should be increased. Meanwhile, Sen. John McCain told CNN that he spoke with Bush this morning and proposed a three-point plan that includes raising FDIC limits on individual bank guarantees from their current $100,000 to $250,000. DEXIA CAPITAL INJECTION: In the latest in a string of moves to prop up ailing European banks in recent days, governments in Belgium, France and Luxembourg said Tuesday that along with existing shareholders they would pump $9.24 billion into Belgian-French lender Dexia SA (DEXB.BT) after its stock plummeted 30% on Monday. FRENCH MEETING: French President Nicolas Sarkozy met with heads of the country's largest financial institutions Tuesday in order to assess their liquidity needs IRELAND'S MOVE: The Irish government Tuesday announced a surprise decision to safeguard the Irish banking system for two years, guaranteeing all deposits, covered bonds, senior debt and dated subordinated debt of the four main banks. UK REACTION: U.K. authorities seem to be leaning against offering a blanket guarantee for deposits and some debt similar to the one Ireland made available Tuesday, with a senior U.K. Treasury official saying Tuesday each country needs to take its own action. Click here to go to Dow Jones NewsPlus, a web front page of today's most important business and market news, analysis and commentary: http://www.djnewsplus.com/al?rnd=ssOOQJa0bVq17iQhEhuI6g%3D%3D. You can use this link on the day this article is published and the following day.
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