U.S. to Take $250 Billion Stake in Banks

The federal government on Tuesday unveiled a sweeping plan to invest up to $250 billion in equity into U.S. banks, among other measures intended to shore up the debilitating crisis of confidence that has seized credit markets and sent equities plummeting.

Treasury Secretary Henry Paulson said nine major financial institutions have already agreed to participate in the voluntary program in which Treasury will buy preferred shares through funds raised the $700 billion bailout package Congress recently passed.

The same institutions also have agreed to a plan in which the Federal Deposit Insurance Corp. will temporarily guarantee the senior debt of all federally insured institutions and their holding companies, as well as deposits in non-interest bearing deposit transaction accounts in exchange for a greater supervision. ...