My finance view

The Treasury could pump $250 billion into U.S. banks in what Federal Reserve Chairman Ben Bernanke called on Tuesday a comprehensive attempt to end the credit crisis, restoring market confidence and sending Tokyo stocks up 14 percent.

Japan, which forced its big banks to write off billions of dollars in bad loans earlier this decade with state help, said it could inject public funds into regional banks to make sure that small firms facing a credit crunch can find cash.

The Treasury is due to unveil its plan at 8:30 a.m. EDT, with about half of the total figure likely to go to the top nine U.S. banks alone as part of a capital infusion aimed at getting banks to lend to each other again, people familiar with the plan said.

Fed Chairman Bernanke said in an article published on the Wall Street Journal’s website that the measures, which he did not detail, constituted a broad-based attempt to end the crisis.

“These steps will allow us to restore more normal market functioning and encourage private capital to further support the reinvigoration of financial markets,” he wrote payday advance.

The U.S. move follows pledges of more than 1 trillion euros ($1.36 trillion) by Britain, Germany, France and other European countries to bolster their banks.

Many countries have also taken action to reassure savers by guaranteeing bank deposits. South Korean Finance Minister Kang Man-soo was quoted as saying Korea could raise guarantees on deposits and might even guarantee banks’ foreign currency debt.

In response to the global moves, Japan’s Nikkei soared 13.8 percent when Tokyo reopened after a holiday and MSCI’s index of Asia-Pacific stocks outside Japan rose nearly 7 percent after hitting its lowest since December 2004 on Friday. 

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