Steps taken to counter Subprime Crisis

1. Steps taken to counter Subprime Crisis

2. Steps Taken By USA • Program to buy Treasury securities worth $300 billion. • To push down mortgage rates Fed plans to buy $1.25 trillion worth of securities issued by mortgage finance companies Fannie Mae and Freddie Mac by the end of the year. • $787-billion economic stimulus package as well as a series of massive lending programmes to help revive the banking sector.

3. The target range for bank lending rate is zero to 0.25 percent. • The central bank held interest rates steady at record lows, with a closely watched bank lending rate near zero.

4. Steps Taken By Japan • The growth comes after 4 consecutive quarters of contraction • Massive government stimulus ($260 billion) helped to boost the economy. • Cash handouts, subsidies to buy energy efficient cars etc.

5. Japan’s recovery hinges largely on its overseas markets, which are showing signs of stabilizing • Overall exports up 6.3% during the quarter due to increase in the demand from China. • Emergency Guarantee Programme to prevent bankruptcy in rural areas. • The shift in the power from LJP to DJP will be a relief; but it might just create instability during crucial times of economic recovery.

6. The recovery may not be sustained once the $ 2 trillion in worldwide stimulus that propped up sales for exporters runs out. • 40 % of the factories still sit idle forcing them to cut cost and so slay off employment. • The growth we’re seeing is based on government spending and a rebound from the very low level in the previous quarter.

7. Steps taken by Europe • Stronger exports and consumer spending, as well as government stimulus packages, contributed to the growth. • France and Germany were less hit comparatively because financial sectors account for smaller proportion of their economy. • Growth is boasted by the fact that imports fell shortly. • The situation is still fragile with investment banks and stock prices

8. Steps taken by France and Germany FRANCE GERMANY • Household consumption increased by 0.4%. • Government incentive schemes for trading in old cars, together with falling prices, were helping consumers. • Foreign trade contributed 0.9% to the GDP figure. • It went into recession because exports collapsed. • Exports have grown at the rate of 7% due to growth in the demand from China. • Imports declined sharply than exports. • Increase in household and government expenditure.

10. Steps taken by Australia • Govt . has given a stimulus package of $26.5 billion for infrastructure projects and cash supports for lower income families. • Providing an impetus to private investors for a public private partnership (PPP). • Australia's central bank has cut interest rates from 7% to 3.25% and also reduced petrol prices. • Plan aimed to support 90,000 jobs while boosting economic growth

11. The stimulus package boosted public spending to a mammoth $19.3 billion. • Retails sales went up .

12. Brazil: • Abandons its tax on foreign investment. • Plans to sell $50bn in dollar swap futures contracts to defend currency. Russia: • 950bn Rouble long term funding to Banks • 1.3trillion Rouble to State-run Vnesheconombank to service Russian Banks’ foreign loans China • Abandons its tax on foreign investment • Plans to sell $50bn in dollar swap futures contracts to defend currency