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Central bank: US gov't mortgage rescue positive to market stability

(Xinhua)
Updated: 2008-09-08 22:49

BEIJING - China's central bank said on Monday that it believed the US government mortgage rescue plan would be positive to financial market stability.

"We think these measures will have a positive impact on helping stabilize the financial market and lift up investor confidence", Li Chao, spokesman of the People's Bank of China, the central bank, told Xinhua.

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"The US financial market is closely linked to the world economy and the global financial markets. The US government should take its responsibility in maintaining financial market stability and protect investors' interests", Li said.

The US government announced on Sunday that it would take over the two mortgage giants Fannie Mae and Freddie Mac in order to stabilize the financial market.

The rescue plan would enable the Treasury to purchase mortgage-backed securities from the two firms in the open market. It also included the departure of Fannie Chief Executive Daniel Mudd and Freddie Chairman and Chief Executive Richard Syron.