Could Paulson be wrong with the $700 billion bailout?

As US Treasury Secretary Henry Paulson prepares legislation that will allow the government to buy billions of dollars worth of “toxic” bank assets, economists thrash out if it is the right move for America. The UK’s top regulator the FSA has said that the $700 billion dollar banking bailout could mark the “turning point” of the current global financial crisis.

As Washington officials work throughout the weekend economists have been calling the operation the largest of its kind since the Great Depression.

Mr Paulson said in an interview with Sky news: “We have got to sort through the remaining steps of the crisis and hopefully we are near the end of that. We then have to step back and really work out what has gone wrong.” The US Treasury Secretary also hinted that non banks like Royal Bank of Scotland and Barclays may also be able to take part in the US Treasury scheme. “It’s got to be clean, it’s got to be quick,” he added.

The UK Government is concentration on the Government-backed Special Liquidity Scheme launched by the Bank of England earlier this year to help shore up banks’ balance sheets and have said they have no plans to carry out a plan similar to that of the US Treasury scheme.

Read the full story in the ukpress