The US have announced today that they will be investing billions of dollars into the banking industry in order to combat the global financial crisis. After a lengthy meeting with congress members late on Thursday the US treasury secretary Henry Paulson said new laws were needed to deal with the “root” of the problem.

This meeting comes after a series of shocks to the financial industry around the world. This week we saw one of the biggest banks in America, Lehman Brothers sink into liquidity. This was a massive shock for millions of people as no one would of guessed that such a big company could go down.

The UK have been preparing for the ripple effect to hit us and have thus invested £27Bn into keeping the UK economy alive. This is such a strange time for everyone at the moment and no one is sure what to think. Which business will plunge into the abyss next? In London an announcement was made that the financial services authority is to temporarily ban short-selling in certain financial companies who have been added to the dramatic change in sentiment. Short selling is when a trader borrows shares from another to sell them then buy them back at a lower price therefore pocketing the profit margin.

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