Mexico's Slim says investors should rescue US banks
MEXICO CITY, Sept 30 (Reuters) - Private investors should take stakes in U.S. banks to save them from financial ruin, with the government buying failed mortgage debt only as a last resort, Mexican billionaire Carlos Slim said on Tuesday.
The best solutions to the widening credit crisis, which led this week to deep slumps on stock markets around the world, are ones like billionaire Warren Buffett's recent $5 billion investment in Goldman Sachs Group (GS.N), Slim said.
"The institutions that have had these problems should look, as some have, for private capital to strengthen them," he said at a lunch with the foreign press.
U.S. President George W. Bush and congressional leaders worked on Tuesday to revive a $700 billion bank bailout package after legislators rejected it on Monday.
The U.S. rescue plan, which would allow the Treasury Department to buy toxic mortgage-related assets from banks, had been the main hope to unlock credit markets and head off a deeper economic downturn in the United States and abroad.
Slim, one of the world's wealthiest men, said that if the government must get involved in bailing out banks, it would be better to invest directly in the firms than buy up their failed loan portfolios.
Many Americans see the $700 billion fund as an unfair burden on taxpayers and a reward for powerful bankers they blame for creating the housing market bubble.
In a financial crisis in Mexico in the 1990s, the government bailed out the country's banks by buying their failed loans in a $100 billion operation that is still sorely felt by taxpayers.
Last week's announcement that Buffett's Berkshire Hathaway Inc (BRKa.N) (BRKb.N) was investing in Goldman Sachs created a major boost for the Wall Street bank.
The following day, Morgan Stanley (MS.N) said it would sell up to a 20 percent equity stake, worth as much as $8.5 billion, to Japan's largest bank, Mitsubishi UFJ Financial Group Inc (8306.T). (Reporting by Noel Randewich, editing by Richard Chang)
