===========================================================================
President's Radio Address
===========================================================================
-->

For Immediate Release Office of the Press Secretary October 18, 2008

President's Radio Address

˙˙President's Radio Address
˙˙Audio ˙˙En Espa¤ol

˙˙˙˙˙ In Focus: Economy

THE PRESIDENT: Good morning. Our Nation is dealing with a serious financial
crisis. Over the past month, Americans have witnessed fast-moving events
involving complicated financial issues. I know many of you are concerned
about your finances. So this morning, I want to tell you how we're
addressing the uncertainty in our economy.

The federal government has responded to this crisis with systematic and
aggressive measures to protect the financial security of the American
people. These actions will take more time to have their full impact. But
they are big enough and bold enough to work.

The primary focus of our efforts is addressing the underlying problem
behind the freeze in our credit markets. Earlier this month, Congress
passed bipartisan legislation authorizing the Treasury Department to use up
to $700 billion to help banks rebuild capital. This week, I announced that
the Treasury will use a portion of that money to inject capital directly
into banks by purchasing equity shares. This new capital will help banks
continue making loans to businesses and consumers. In addition, the
Treasury will use part of the $700 billion to purchase some of the troubled
assets that are weighing down banks' balance sheets and clogging the
financial system. This extraordinary effort is designed with one overriding
purpose: to help banks get loans flowing to American consumers and
businesses, so they can create jobs and grow our economy.

Archives

Radio Address: 2008 2007 2006 2005 2004 2003 2002 2001

Radio Interviews: 2006 2005 2004
FAQ

I can't find a radio station that carries the radio address. Do any
stations in Pomona carry it?
Click here for answer....

˙

˙ I know many Americans have reservations about the government's approach,
especially about allowing the government to hold shares in private banks.
As a strong believer in free markets, I would oppose such measures under
ordinary circumstances. But these are no ordinary circumstances. Had the
government not acted, the hole in our financial system would have grown
larger, families and businesses would have had an even tougher time getting
loans, and ultimately the government would have been forced to respond with
even more drastic and costly measures later on. So I decided that
government had to move, but that government's involvement in individual
banks had to have prudent limits.

The government's involvement is limited in size. The government will only
buy a small percentage of shares in banks that choose to participate, so
that private investors retain majority ownership.

The government's involvement is limited in scope. The government will not
exercise control over any private firm, and federal officials will not have
a seat around your local bank's boardroom table. The shares owned by the
government will have voting rights that can be used only to protect the
taxpayer's investment -- not to direct the firm's operations.

The government's involvement is limited in duration. It includes provisions
to encourage banks to buy their shares back from the government when the
markets stabilize and they can raise money from private investors. This
will ensure that banks have an incentive to find private capital to replace
the taxpayer's investment -- and to do so quickly.

I know many of you are also concerned about the price tag of this rescue
package. Ultimately, we believe the final cost will be significantly less
than the initial investment. Many of the troubled assets that the
government buys will increase in value as the market recovers. That means
the government eventually will be able to resell them for a higher price.
In addition, the government will receive quarterly dividends from the
equity shares it purchases in financial institutions. If banks do not
repurchase these shares within five years, the dividends they owe the
government will increase substantially. This provides a clear incentive for
banks to buy back their shares, thus returning the money to taxpayers, as
soon as possible.

In the long run, the American people can have confidence that our economy
will bounce back. America is the best place in the world to start and run a
business, the most attractive destination for investors around the globe,
and home to the most talented, enterprising, and creative workers in the
world. We're a country where all people have the freedom to realize their
potential and chase their dreams. This promise has defined our Nation since
its founding, this promise will guide us through the challenges we face
today, and this promise will continue to define our Nation for generations
to come.

Thank you for listening.

# # #

˙
===========================================================================
Return to this article at:
http://www.whitehouse.gov/news/releases/2008/10/20081018.html