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US Giving Plan to Revive Lending More Time


The U.S. government will wait a little bit longer before putting part of its plan to jumpstart lending and spark the economy into action.

The U.S. Treasury Department said Monday it is extending a key deadline to give private investment firms more time to participate in a program to buy bad investments, also known as "toxic assets."

U.S. officials have said banks are reluctant to lend money to businesses and consumers because they own too many of these bad investments. They hope that buying the bad investments from the banks will ease tight credit markets.

The Treasury Department also said it is relaxing some of the requirements to enable more firms to participate.

Treasury Department officials have been studying the health of banks across the U.S. to determine which banks need the most help.

"The Wall Street Journal" reported regulators plan to meet early this week to determine how to interpret the results of the so-called "stress tests."

Meanwhile, the U.S. Federal Reserve and four other central banks in Japan, Switzerland, Britain and the European Union have made a deal to help improve the flow of credit.

The banks said they have agreed to exchange billions of dollars worth of currency (a currency swap), which can then be lent to troubled financial institutions if needed.

On Sunday, U.S. Treasury Secretary Timothy Geithner said he would be willing to oust top officials at banks that need "exceptional" help from the government.

During the interview on U.S. television (CBS' "Face the Nation" program), Geithner said the government would not hesitate to require a change in management to make sure the banks take necessary steps to get stronger.


Some information for this report was provided by AFP, AP and Reuters.

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