Tuesday, October 28, 2008

Banks to use bailout for lending, acquisitions

Analysts see plan to weed out weaker companies as plan morphs yet again

NEW YORK - The Treasury's $700 billion program to rescue the financial services industry, which began with a three-page memo six weeks ago, is evolving yet again.

When the fleshed-out proposal was passed by Congress and signed into law Oct. 3, Treasury Secretary Hank Paulson's plan was to use the money to buy "toxic" mortgage-related securities weighing down banks and clogging the flow of credit to business and consumers.

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