Bailouts are first phase in long-term stabilisation plans

Darling plan designed to address bank liabilities, capital and lack of liquidity, and US bailout package has morphed to follow its example

The US and UK bank bailout plans introduced earlier this month are considered phase one in what is likely to be a long-term effort to turn around developed economies. Phase two has already started, with similar bank stabilisation plans announced across Europe, Asia and Australasia. The US rescue package, approved by Congress on 14 October, was originally focused on bad mortgage assets, although it subsequently morphed to follow the UK plan. The original $700bn plan to purchase troubled assets is still retained but, since it cannot be put into practice immediately, it has been scaled b...