Finally US government agreed to buy stakes in banks in return of capital injection to the troubling banks. This is a big policy change by US government which is a strong supporter of free trade and capitalisam.

When US unveiled it's new $700 billion bank rescue package two weeks back it was not even thinking about buying stakes in banks as US was the main promoter of free trade.

But when it's main alliance United Kingom dared to buy stakes in banks by injecting capital other major European nations also followed the same. That move stabilised world equity markets with big gains including 11% surge in Dow Jones, largest ever point gain in the history.

This actually forced US to follow the same move even though many people are in the administration itself opposed it.

From the day one Treasury Secretary Henry Paulson was against taking stakes in bank. This is clear from his words when he unveiled the government's decision to buy stakes.

"We regret having to take these actions, Today's actions are not what we ever wanted to do. But today's actions are what we must do to restore confidence to our financial system" he said.

President Bush also defended the move by saying that it is an unprecedented and aggressive move by the government.

He also said ""The government's role will be limited and temporary, These measures are not intended to take over the free market, but to preserve it."

He said that once the situation stabilise then banks have to collect capital from investors and repay the money to the government.

But this new plan doesn't help to boost confidence in markets. Dow Jones closed 86 points lower on Tuesday after government unveiled the new plan.