WASHINGTON – President Bush, allying concern about federal intervention in the market, said Wednesday that the government will be a "passive investor" in shoring up banks.
"It's very important for the American people to know that the program is designed to preserve free enterprise, not replace it," Bush said in a meeting with his Cabinet at the White House.
On Tuesday, his administration announced a $250 billion cash infusion into selected banks to help stabilize the system and nudge banks into lending again. Despite the plan, Wall Street remains wary of job losses, the housing crisis and consumers' decision to curb spending.
Bush said the program is limited and designed so that the shares will eventually be sold back and that the banks will remain privately under private control.
"The government will be a passive investor," he said. "There won't be government officials sitting on the boards of private companies."
The president said the plan was necessary to deal with extraordinary hardship in the U.S. economy.
"They are necessary and I'm confident in the long run, that this economy will come back," he said.
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