US outlines steps to help auto industry, housing

12 November 2008 17:00  [Source: ICIS news]

Henry PaulsonWASHINGTON (ICIS news)--US Treasury Secretary Henry Paulson said on Wednesday that federal officials are looking at ways of restoring credit for automobile loans as a means of shoring up the tottering US auto manufacturing sector.


Paulson said that some funds remaining in the $700bn (€560bn) bailout package approved last month by Congress - known as the troubled assets relief programme (TARP) - will be used to revive credit markets for car loans, student loans and other consumer finance vehicles such as credit cards.


“We are looking at ways to possibly use the TARP to encourage private investors to come back to this troubled market by providing them access to federal financing while protecting the taxpayer’s investments,” Paulson told a press conference.


In addition to this developing Treasury Department plan, the US Congress is likely to consider next week a package of up to $50bn in emergency loans to the three major US auto makers.


The auto makers and other US manufacturing and business leaders have warned that the auto sector is on the verge of collapse, in part because even potential car buyers with good credit cannot get car loans.


Along with the US housing industry, automobile manufacturing is a key downstream consuming sector for chemicals manufacturers.


Paulson also said Treasury is examining possible means of forestalling home mortgage loan foreclosures in hopes of keeping more foreclosed homes from flooding the already over-supplied housing market.


“The road ahead for the US economy and the global economy is full of challenges,” Paulson said.


However, he added, “I am confident the United States, under this and the next administration, will rise to these challenges.”


($1 = €0.80)


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By: Joe Kamalick
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