The Bush administration has announced a new plan to partially nationalize the US banking system by investing $250 billion in the country’s financial institutions. President Bush announced the move at the White House.

President Bush: “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.”

Nine of the largest US banks will be forced to accept partial government ownership, including Citigroup, Bank of America, Wells Fargo, Goldman Sachs and JPMorgan Chase. The government will insure deposits in non-interest-bearing accounts and certain types of bank debt. Treasury Secretary Henry Paulson said the step is necessary to revive the economy.

Treasury Secretary Henry Paulson: “Today, we are taking decisive actions to protect the US economy. We regret having to take these actions. Today’s actions are not what we ever wanted to do, but today’s actions are what we must do to restore confidence in our financial system.”